11/26/2005

Debt Free Living Provides Freedom

As a college student, and person in America, I am continually exposed to "opportunities" to buy on credit, increase my line of credit, or buy things now without having to pay for them until later. While all of these concepts seem attractive on the surface, they have serious consequences. As I read this debt article, I learned that debt has more than just a financial impact on one's life. When people are seriously in debt for items other than the basic car, or home, etc., they also can feel the affects emotionally, with depression being a major symptom. I think that this information makes a lot of sense. If you are constantly living on "borrowed money" to get through everyday life, I believe people have the potential to feel very overwhelmed, and helpless. To me, spending less you make provides freedom from the worry, and stress of how to come up with money you don't have for items you already "bought". With costs of living as high as they are, including astronomical prices for housing, healthcare, energy, and food, etc., it is no wonder that many find themselves in debt, however with determination, and careful planning, it is possible to live within a budget, and in doing so, people will experience optimal financial, and emotional health.

5 comments:

Bob said...

I think you make a good point. I have never been able to figure out why people would want to buy something they can’t pay for. Buying items such as clothes, furniture, jewelry, and shoes on credit is just asking for trouble. I think the only reason for a person to have a credit card is for emergency purchases. Let me be more specific, an emergency isn’t when you find a cute pair of pants and a sweater to go with it for a good price and not having the money to pay for it. I’m referring to things like having your car break down when you’re on a long trip, or when you have to miss work for a week because you’re sick so you don’t have enough money to buy food for your family. Debt is a good way to create stress, become depressed, cause a divorce, and destroy your credit. You don’t have to have the latest fashions or the coolest car on campus to make friends. Live below your means and learn how to budget. If you make $1000 a month and your bills are $650 a month that doesn’t mean you have $350 to spend freely.

Tyler said...

I completely agree with the fact that financing and living on borrowed money would create some sort of emotional burden. On the other hand many of the wealthier people that I know live on borrowed funds. The boats, cars, houses, and toys they have are all in effect completely financed. I don’t suggest this approach to living a grand lifestyle but with the kind of cash they make, its working.

Bree said...

I completely agree. My thoughts are that if you can't pay for it today you probably won't be able to pay for it tomorrow. Instead of enjoying an early retirement, you'll be spending your last pennies paying off things you bought 20 years ago. Instead of your kids inheriting your fortune, they'll inherit your debt. It's a bad trend that is especially a significant problem in Utah. We need to go back to our grandparents' old ways of working hard to get the things we need. It'd help us appreciate them more.

maddy said...

Spending money seems to become a habit for people. If people aren't spending they are looking for or thinking of things they could spend on. For some shopping is a way to releive stress and for others debt is okay. Home equity loans (2nd mortgages) are becoming very popular and many people are getting themselves in trouble. While the spending may be good for our economy, eventually it could cause many problems.

Dr. Tufte said...

-1 on Morgan's post for poor grammar.

-1 on Maddy's comment for poor grammar.

These are very common sentiments, and they are correct in a world in which there is no real economic growth.

Except, we live in a world where we can count on real economic growth. This means that "future you" will be richer than "current you". It is an irrational response that has to be nurtured by soceity to dismiss borrowing so blithely in this sort of situation.