Previously I have stated Debt Reduction is Like Teenage sex, lots of talk but no one dares tell you how to do it right, but I think I want to be clearer about debt:
Debt is like teenage sex: everybody talks about how it is so much better now that we talk about it and such, but is it really?
BCM 2011
Now remember I am the father of 3 daughters. Therefore, let’s not go down the garden path about teenage sex. Maybe we should concentrate on the Debt portion of that statement.
Experts keep talking about debt reduction, smart debt or worse still good debt. In fact, debt is just wrong. Yes, as a father of teenagers, I am saying teenage sex is bad. Form a queue on the left if you want to dispute this notion, but let’s stay on topic here.
The people that are rationalizing that Debt is a good thing are banks, pay day loan companies and credit card companies (i.e. the lenders), which makes sense, but why is it assumed that Debt is OK (like teenage sex in our parents generation neither was condoned)?
The arguments that come up a lot of times about Debt are the same ones the teenagers use about teenage sex: everybody else is doing it!. Indeed that is the rationalization for Debt is like teenage sex (i.e. the mob rules).
When did that become a valid excuse?!? Really WTF, we all seem to follow mob mentality a little too easily these days, just ask the law-abiding citizens of Vancouver about that one. Let me give you the answer your parents would have given you, “If Johnny jumped off a bridge, would you follow him?”, which is a valid response to the “everybody is doing it”.
Yes my argument is a bit old school, but do you disagree, is debt not like teenage sex? Do you have an even better explanation of this analogy, I am willing to listen to those as well. Some say debt is like fat ?
Debt Shaming?
My list of debt commentary articles is quite long, so let’s stick with the basics.
- Three Solid Ideas For Your HeLOC is a misdirection title. With interest rates going up, home equity lines of credit are becoming heavier anchors on your financial life.
- Pay Day Loans? Absolutely, positively NO! Go talk to a licensed insolvency professional before you do this.
- Surreal Paragraphs Found in Credit Card Bills, if you carry balances on your credit cards, you are in trouble. Look at their estimate for how long it will take to pay off the debt on minimum payments.
- A Mortgage Changes You, which is very accurate. When you get a mortgage, your life changes, and it will be a major element of your financial decision-making process.
- Make More by Reducing Debt with some elementary (maybe naive) arithmetic.
- Straight Talk on Your Money is not just a good book (and podcast). It explains how debt can get out of control quickly.
- Debt-shaming: Debt is Bad, but You Aren’t having a poke at the “influencers” who say my commentaries about Debt being BAD is debt shaming.
- My coup de grace There is No Such Thing as good debt. Debt is a tool, like a chainsaw, and must be respected.
I agree debt is like teenage sex. Kids hear how great it is and everyone is doing it. But they have no idea on what sex really is. The big picture- it is dangerous because of disease, pregnancy and the after feeling of what was I thinking. Just like teenage sex- debt at first feels great to buy stuff with money we don’t have then the credit card bill arrives and the remorse kicks in- what was I thinking? It’s also dangerous because the more debt you get into the more you guarantee you’ll remain the slave of the lender and maybe one day file for bankruptcy.
I agree debt at certain times can be a tool for building wealth but consumer debt will always be bad.
Debt sucks but I did enjoy teenage sex.
HIYO!!!! I cannot make the same claim, having never experienced the latter!
Interesting analogy! Debt is certainly bad if you are over your head and cannot keep up with payments. If you are efficient at keeping a personal budget and paying out less than you make some debts are very necessary: a car, an education, a home, health care costs. However, delaying self-gratification is a requirement for avoiding deep personal debt. If you’ve gotten so deeply into debt and continue to do so, the interest rates will drown you. There is help out there if you’re such a position. Finding a bankruptcy trustee could help save you before you actually do drown. Here’s an article that I found helpful about finding a bankruptcy trustee.
The only acceptable debt is credit accumulated for pupose of buying an income producing asset, that will generate more income than the interest payments. I don’t view a car or a wardrob as acceptable reasons to accumulate debt. Maybe you should say a credit card bill is like peeing on a stick, if it says anything but 0 your in trouble
I’m not going near the analogy but I do believe some debt is useful. For example, if you need a car for a better job, a house, or even education. The problem IMHO is that people don’t think about whether they can handle the debt and too often use it for immediate consumption items ending up buying stuff they don’t need or are better off waiting for. In the end they pay more when interest is added in and interest ends up working against them rather than for them.
This includes the U.S. government.