Today we welcome Daisy Flower, our regular Thursday contributor.
I’m fortunate in the sense that I’ve never been in crushing, overwhelming, creditors-calling-me-ten-times-a-day debt.
When I was 18 I got my first credit card, and I figured it was as good as free money and spent with abandon on it. I racked up a statement of a couple thousand dollars, and it was a huge deal to me at the time, but it was paid off fairly soon.
Then I had my car loan, which I paid off in July three and a half years early. WOOHOO!
My attitude isn’t one of “no debt ever”, but rather one of “debt only if the benefits of the debt outweigh the cost of interest”. In my case, my car did outweigh the $400 in interest that I incurred over the term of the loan.
My partner’s stance, however, is vastly different. He is adamantly against debt. I consider this a good thing, because I don’t want an indebted future spouse. My partner would go through much more drastic measures to get rid of debt than I would.
Now for some fun… Let’s say you were $100,000 in debt and with your income, it would take you 10 years to pay off. Would you:
Rent out a Room?
We are pretty private people, so the idea of renting out a room in our house to somebody we don’t know makes the both of us cringe. We’re okay with renting a suite because it’s completely separate, but renting a room would mean that we’d have to share a kitchen and a living space with a stranger.
For those who are in debt, however, the discomfort of living with somebody outside of your family may outweigh the discomfort of living paycheck to paycheck, or worse.
Cut Out the Smart Phone?
It seems that everyone has a smart phone these days, and that it’s almost impossible to live in our society without one. I feel disconnected when I leave my house without my phone, and it puts me off for my entire day, but smart phones are much more expensive than a traditional cell phone (or no cell phone at all).
$100,000 debt is pretty crushing, and I think that I’d cut out my smart phone to pay it off more aggressively.
Get Rid of Pets?
We would never do this no matter what, but pets can be expensive and if you were drowning in debt. It might be an obvious answer to saving money each month. I’m sure this would be very sad for anybody, but sometimes it’s the only answer.
Sometimes, in some families, bankruptcy is the only way to continue on. If your income is too low compared to your debt and there’s no hope in ever paying it off, would you declare bankruptcy?
I don’t blame some people that do, because it all depends on the situation of the family or individual who is in that much debt. Being that I have no children and no real commitments besides my partner and home, I think I’d get a third job and work 20 hours a day before falling back on bankruptcy. However, I realize not everyone has the same lifestyle that I do.
Let Your Home Go Into Foreclosure?
It wouldn’t be unheard of to let a home go into foreclosure when families get in over their heads with debt. I’ve read quite a few articles recently that show that some people who aren’t even in crushing debt do this, because they just don’t want to have to go through the strain of buying and selling homes.
If you were in a debt that would take you ten years to pay off and take all of your extra income, would you stop paying your mortgage?
Have you ever been in crushing debt? How far did you go to pay it off? If not, and were in a situation like this, how far would you take it?