Forever in Debt

Easy finance is everywhere. It seems all you have to do is ask, and you’ve got yourself a loan. Want a car? boat? house? 3 month holiday? Get it on credit.

It’s a far cry from my parent’s generation. Sure they struggled, but they always knew where they stood in terms of money. Their commitments were clear: a 20 year mortgage to own their own place.

How much murky are things today! I still have a student loan which runs into the tens of thousands of dollars. There’s still a good decade left on that one.

Credit card offers come in by the week, I kid you not. How many Visa cards do I need? I thought only one.

It seems like the greatest of traps for a young person today. You can imagine a 21 year old who has committed themselves to two decades of debt by the time they finish college.

Debt is not something to be taken lightly.

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9 Responses to “Forever in Debt”

  1. SilverTiger Says:

    Money makes money but only if you are in the right business.

    In the UK, great concern is being expressed about the huge debt accumulated by borrowers. Young people have developed the belief that it’s OK to take out as many credit cards as they can and spend to the limit on each one. They regard such continual debt as normal.

    At one time I accumulated a large debt on credit cards. I came to my senses and started paying it back. I went of using the cards but I paid each month’s new balance and a fraction of the debt. Gradually I paid it off. Since then I have always paid each month’s account in full.

    Borrowers don’t always understand that when you borrow, you are in effect spending money that you haven’t earned yet. So you are creating a commitment for the you of tomorrow. As you cannot know what position the you of tomorrow will be in, that is a very bad idea.

    When I was a kid, we were told that if we wanted to buy something expensive we should save up for it. That is still the best advice. Modern society is based on debt (mortgages, buying things on “credit”, etc) and a lot of our problems stem from this.

    We are being exploited like cattle by the money corporations but people seem unable to see this.

    SilverTiger

  2. homeyra Says:

    Is this really very very politically incorrect to name it the neo-post-modern slavery?
    Instead of using force you make people beg to stand on the line?

  3. globetrotteri Says:

    Being in debt sucks. I seemed to always be worrying about money matters when I was living in North America. Not so in Asia. I haven’t incurred any debt while living here. It’s great. I’ve been able to pay off my student loans and I don’t worry about things like loans, mortgages, and credit cards. I pay cash for everything and I can’t tell you what a weight off my shoulders it is to not have to worry about things like this. I’ve gotten used to this kind of lifestyle and I’m in no rush to return to the land of credits and loans anytime soon. I wish it could be the same everywhere.

  4. xluman Says:

    SilverTiger in “on the money” by stating “Borrowers don’t always understand that when you borrow, you are in effect spending money that you haven’t earned yet. So you are creating a commitment for the you of tomorrow.”
    This point is driven home by this post:
    credit card obligation

  5. pauaprincess Says:

    Never a borrower nor a lender be. Shakespear in the Merchant of Venice wasn’t it?

    I am slowly paying off loans in fact I paid off one the other day taken out to cover debts while on maternity leave. Have a kid, pay it off when they go to school. But when I had my children, the youngest is now 5, there was no such thing as paid maternity leave.

    Now I am hitting the credit cards, then apart from the mortgage, I will be debt free. I cannot wait! Only 10 yrs to go on the mortgage too.

  6. ggwfung Says:

    Thanks to SilverTiger for this great reply. Kudos, as always.

    and globetrotteri, always glad to see your name pop up. You’ve got a lot of life experience to share.

    xluman, thanks for the link

    and pauaprincess, things are even more complicated when your financial state affects more than one person.

    and homeyra, cryptic as always. It’s like a haiku. I’m sure I’ll solve it eventually.

    Thanks for all your comments. I take them to heart and try to incorporate them into my thinking.

    ggw

  7. Gregor Says:

    Oh the good old wrestling match with debt. It is definitely a good exercise in cultivating discipline. I am attempting to get a bit more single pointed on this financial goal.

  8. tobeme Says:

    While in debt you are never truly free!

  9. dan k Says:

    i think the problem lies with how easy these credit firms make it for people.

    Take ( i will not name the firm), they will give you a credit card even though you are out of work, now how on earth is someone out of work going to be able to keep up the monthly payments ??, Now these guys dont care because they just sell the debt on to these collection firms and they wash their hands of it.

    It just becomes a never ending cycle of debt that the individual cannot seem to get out of.

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