Is Debt Normal And Sexy?

Paying off our credit cards on time and in full is a must, but if we all did that then Gail Vaz-Oxlade and I wouldn’t have needed to produce the above video.

It’s simply amazing how much debt is out there.

Seriously, is debt normal? When did it become sexy to talk about? Debt seems to be just an accepted thing now and that should be a serious concern for us. Just take a look at this conversation that occurred after I originally tweeted the video.

I’m not trying to single out Barry here but having the attitude that debt is normal, or everyone has debt so it’s okay is the last thing we should be thinking.

Another friend of mine once said “debt is a part of enjoying life”. I thought he was joking, he wasn’t. He had accepted that debt was part of his life and he no repayment plan.

 Related: 6 Things we need to know about credit cards

Debt is not something to brag about

Recently I’ve noticed people are happy to talk about their debt as if it’s an achievement, almost like it’s a status symbol. They’re even starting to brag about the big amounts they owe.

A friend of a friend recently got a new job and within a few weeks of getting this job he was convinced he needed a new car. Within an hour of heading to the dealer, he had purchased a car that cost more than a year of his salary. Yes he got a raise but his spending/expenses quickly outpaced that increase.

Could he afford it? Of course not, but the salesman was more than happy to offer him a longer lease period to bring his monthly payments down. 2 weeks later, the friend was telling all of us how he could barely afford the payments and insurance on his luxury car. As far as he was concerned, the car was an investment in his comfort.

Let’s be clear; car+investment don’t belong in the same sentence. He was literally bragging about the debt he had just taken on.

 Related: How much car can I afford?

is debt normal car

Having an affair with credit

The cost of a wedding are getting more expensive every year; it’s surprising that couples aren’t looking to cut back on their big day. Instead they have just accepted it and no longer care about the costs. It’s not just the wedding they’re spending tons on, the honeymoon costs are also increasing, but this is because some couples refuse anything below first class. I know of two couples who have decided to put their entire weddings on credit.

Yes you read that right, their entire wedding is being paid by credit.  They have no idea how they’re going to pay it back, but I’ve been assured their wedding nights will be an enjoyable adult affair to remember.

I try not to judge people but, ARE YOU INSANE?  Having credit card debt is not normal, nor should we be bragging about it.

Now I see why Gail gets so frustrated on her shows.

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Image courtesy: opus moreschi / Flickr

By | 2016-12-06T23:37:08+00:00 April 28th, 2014|Credit cards, Debt, Personal Finance|

20 Comments

  1. My Own Advisor April 28, 2014 at 8:37 pm - Reply

    I think debt is good for appreciating assets, in a low-interest rate environment….provided, you can and do pay the debt off.

    Debt for depreciating assets, in any borrowing environment is bad.

    Debt on “stuff” is very bad.

    Mark

    • Barry Choi April 28, 2014 at 8:40 pm - Reply

      Definitely there is good debt assuming you don’t pick up more than you can handle.

      Everyone knows I love to travel but I would never travel unless I was able to pay it off in full.

  2. Ben April 29, 2014 at 6:57 am - Reply

    Certain debt is normal and acceptable. Student debt can be wise when it has a reasonable expectation of raising an individual’s income significantly beyond that expected for someone with no education. Trades often offer exceptional return on investment, fine arts degrees can often offer negative returns.

    House debt can be acceptable as long as housing market fundamentals are examined, ability to service mortgage debt stays well within reach should interest rates return to historical levels, and if you have a real need for the amount of house you buy. Personally I don’t need the space or added costs of a house, I rent and save more than my equivalent mortgage principle payments.

    Vehicle debt is normal, but not necessarily good. For a very significant portion of a car loan you actually owe more than the car is worth, so you should take that into account and keep cash or near cash assets on hand to offset that difference should your vehicle be either written off or have to be sold. That said, vehicle debt is never good debt. People typically buy vehicles that exceed their requirements for 95% of their driving requirements. For instance most people with trucks could probably drive a compact car 95% of the time, only 5% of the time do they actually need the truck.

    • Barry Choi April 29, 2014 at 9:25 am - Reply

      Ben,

      You’re spot on with your comments.

      Student Debt) I definitely agree long term it can be a great investment if in the right program. Here’s a guest post about the cost of getting an MBA.

      http://www.moneywehave.com/calculating-the-real-financial-cost-of-an-mba/

      House debt) For sure if we stay within budget and know how much debt we can handle it’s great but too often now especially in the big cities people are just buying for the sake of buying and ignoring all fundamentals.

      Vehicle debt) What I’m also seeing is people buying a new car whenever they reach a career milestone. Oh because you got a promotion at work all of a sudden your old car is not good enough? It makes no sesne.

  3. David April 29, 2014 at 1:18 pm - Reply

    I always thought it odd that when I bought a new car or a house the sales person says “Congratulations!” I always thought I should be congratulating them, they’re one that made the big sale and got paid.

    • Barry Choi April 29, 2014 at 3:15 pm - Reply

      David,

      That line is brilliant, I need to start using that one.

  4. Kratos April 29, 2014 at 1:40 pm - Reply

    I love debt, but only when others take it on. With debt, these suckers- err masses taking on debt for things they can’t afford, it allows savers like me to exploit them so they can make me wealthier via my investments. Sorry, life’s pretty good when I’m financially free by my mid 30s.

    • Barry Choi April 29, 2014 at 3:20 pm - Reply

      Kratos,

      Yes it can be fun to laugh at others questionable decisions but I would much rather prefer if we all had a better grasp of our finances.

      Of course then I would have nothing to write about.

  5. Alex April 29, 2014 at 5:17 pm - Reply

    I was raised by parents that were never not in debt. They’re still in debt today, to the tune of $65,000, and they’re 82 and 76. They’re retired and live the bare minimum of government pension. They will NEVER repay what they owe.

    For much of my 20s, I seemed destined to follow them: I wasn’t raised to think that debts were to be avoided – despite having lived with my parents through their run ins with bill collectors, and even an eviction (!) – debt was just a constant factor in our lives, like air, or sunshine.

    I graduated with debt, and piled more debt on top. I had a good-paying job right after University, but spent as much as earned (an then some) mostly making fixed student loan and car payments, but also on meals and socializing, living the life I thought that I was entitled to live.

    It wasn’t until I got into a long – term relationship that I was told that debt was NOT a normal experience for most people, (certainly not for her) and that debt was meant to be seen as something to be avoided. The relationship didn’t last, but the lesson that ‘debt was to be avoided’ sure stuck with me.

    Every few years I get a panicked call from my parents that the’re in trouble, and require a ‘bailout’. We help out here and there, where we can afford to do so, but structurally, they’re beyond help. I recall the stress I felt when I was racking up debt, and I can only imagine the stress that they feel – if they feel anything at all, anymore. Mostly when I talk to them we avoid the subject.

    • Barry Choi April 29, 2014 at 5:25 pm - Reply

      Hey Alex,

      Thanks for sharing that story, your parents aren’t alone but definitely still something scary to think about.

      Great that you’ve taken things serious, but I can totally see why conversations can be awkward.

  6. Alex April 30, 2014 at 10:52 am - Reply

    Barry, the point that I was trying to make was that sometimes, people’s attitude towards the accumulation and maintenance of debt is a legacy that they inherited from their parents. Nobody from my family ever pulled me aside, and told me it was dumb, and it was not until I got to look inside someone else’s family dynamic that I realized that my family had a problem.

    • Barry Choi April 30, 2014 at 10:56 am - Reply

      Very good point Alex, I was brought up to always save so hearing about the other side of things is a bit of an eye opener.

      Money can be a taboo subject that’s difficult to talk about with family or anyone for that matter. I wish they taught some basic personal finance in school e.g. compound interest.

      Compound interest is great when you’re saving but it can be crippling if it’s your debt that is compounding. If we all knew how it worked I wonder how many of us would be piling on the debt.

  7. janet ries April 30, 2014 at 11:24 pm - Reply

    Hi Barry. As a social service worker with 10 year experience working with low income families, I can vouch that most people don’t know what they are doing when it comes to money. The marketing, fear tactics and yes, even the banks keep telling what we should do now which leaves people with a whole pile of products and still clueless. It’s not 100% their fault.

    I recently launched themoneycounsellor.com which is a service in Durham Region and surrounding areas similar to what Gail offers on tv but we’re a whole lot nicer lol. Also our support does not include the selling of products, investments or insurance. I’d love you to check us out. Keep the conversation going. It helps.

    • Barry Choi May 1, 2014 at 12:51 am - Reply

      Hey Janet,

      Yes education definitely is a problem when it comes to finances. I definitely wish I was taught the basics in school, I’m not perfect and definitely have made mistakes.

      Good to hear that you are helping the community and I will for sure check you guys out.

      Oh and I know Gail personally, she is absolutely lovely. Debt just gets her frustrated.

  8. […] We Have doesn’t think debt is normal or really that sexy.  I think dividends are […]

  9. Ian May 5, 2014 at 1:42 am - Reply

    I am always surprised at how much people spend on their cars, and yet they don’t take the trouble to learn more so they can spend less. I have always been really interested in cars, one upside is that I have had a string of 8+ year-old small used cars that I buy cheap and get reliable transport from for at least 2 or 3 years, sometimes closer to 10 years. And I have found that quite often, the people who are impressed by the car you drive are not really the people you are trying to impress…

    • Barry Choi May 15, 2014 at 12:46 am - Reply

      Hey Ian,

      Missed this comment earlier. Yes crazy how much people spend on their cars. Our most recent car we bought used, obviously we were able to save a ton of money. Not only that but since we bought used we were able to buy a slightly nicer model that we were eyeing that fit our demands.

      I could care less if people think less of us since we bought used. The car is to just get us from point A to B

  10. A Frugal Family's Journey May 15, 2014 at 12:43 am - Reply

    I would say a high credit line is Sexy…but high debt is NOT! If you can’t pay your credit card in full each month, then you are spending beyond your means. Paying interest on your debt is also definitely not Sexy!

    • Barry Choi May 15, 2014 at 12:47 am - Reply

      Credit lines can be very helpful if you know how to use them. I sometimes think that people don’t quite understand how interest works hence why they continue to spend beyond their means

  11. […] achievement, almost like it's a status symbol," Personal Finance Expert Barry Choi remarks in his article, "… having the attitude that debt is normal, or 'everyone has debt so it's okay' is the last […]

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