Top 10 Excuses for Being in Debt
While the topic of debt and debt reduction is deadly serious stuff, we can poke fun at it (at least I can).
Top 10 Excuses ?
Some of the reasons I have read and heard about why people get into debt (with my tongue firmly pressed in my cheek):
- It’s glandular (also the ever popular, I’m not in debt, I just have a small wallet)
- I was supposed to open those letters from the Credit Card company? I thought they were just more advertisements from them.
- All my money disappeared when I bought a new mattress and forget I’d left my money in my old mattress
- I decided that if I was going to buy a car, I should buy the best car, who knew a Ferrari could cost so much?
- I’m not in debt, I plan on winning the lottery and paying it all off , but until then, I will just pay the interest.
- It’s not debt if you have enough money to pay everything off, it’s just all tied up in my investments in Nortel and Ford.
- I only have good debt, so that is OK. Unfortunately I heard this from a guy who had student loans that were over $100K because he wouldn’t ever leave school. The concept of Good Debt, is much like having Good Gun Shot wounds
- I was a victim of identity theft, but I just haven’t reported it yet. That’s along the lines of the bad joke: My spouse’s credit card was stolen, but I haven’t reported it yet because the thief is spending less than my spouse did
- The only reason I am in debt is because I owe more money than I currently have. I’ll take D’UH! for $1200 please Alex.
- I don’t know, it just happened. Unfortunately, this one is not as humorous, because it is too true.
Any other crass or humor-like excuses that could be added to this list?
I guess I tend to disagree on the concept of good and bad debt. There is good debt if the debt will earn you more than enough money to offset the interest paid.
A couple months back, I ran the numbers on my wife’s law degree, and figured that the all-in costs of going to law school will be about $110k over 3 years (of which about $36k will be borrowed, the rest made up in lifestyle adjustments – such as foregone vacations, a diet with less meat content, etc. – and savings. Based on my estimates at the time, I figured the ROI is about 22.5% (28 year annuity of $25k, a fairly conservative estimate of how much her future income with a law degree will exceed her potential future income on her current career path)
There’s lots of unknowns in such an analysis, not the least of which is where her current career could lead, but based on reasonable estimates, and maybe we’re underestimating it based on its current appearance of dead-ending. Still, I have a hard time seeing how this wouldn’t qualify as “smart debt.”