Avoiding debt



Looking back, it seems to me it would have been a whole lot easier not to have gotten into debt in the first place, instead of getting into debt and struggling to get out.

If you’ve never been in debt, I’d like to hear from you. What helped you avoid it? If you’re like me and did get into debt, what do you think would have helped?

Here’s what I think would have helped me:

Hindsight is 20/20, but I’ve always felt that debt was bad — even as a kid. I saw the stress it brought to people, so I never wanted to borrow money.

But somehow, I borrowed money anyway.

I think part of the problem was that I didn’t really have a good definition of what debt actually was.

Maybe that sounds dumb, but that’s how it was.

I thought that debt meant putting something on a credit card and then not paying it back right away, or borrowing money to go to college.

So I didn’t do either of those (at least not until I’d already gotten into debt using other methods.)

Somehow I didn’t realize that debt also happened when my dad went out and bought a part for my car, and told me to pay him back.

I also didn’t really think about it that having a car payment meant being in debt. (Just look at how “having a car payment” is phrased, if you want to know why I didn’t give it much thought.)

I thought that making payments was just how everyone bought cars, unless they were buying a junker to fix up.

Of course, I knew intellectually that I was borrowing the money. It just didn’t sink in emotionally.

But now I have a much cleaner definition of debt:

Debt is when you don’t have the money to pay for something right that second, and you buy it anyway.

One of the most important steps in getting out of debt for me was just waiting until I had the cash to buy something.

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Posted in Debt on Jun 05, 2009

4 Responses to “ Avoiding debt ”

  1. # 1 Chelsea Says:
    June 5th, 2009 at 8:48 am

    I’ve never been in debt. One of the main things that helped me accomplish this was being educated about money by my parents, who are financially conservative. I wasn’t necessarily raised to be frugal, but rather to be practical and research my purchases. Also, I was taught to treat saving as a mandatory expense each month. Even when working low paying jobs as a teenager, I always put something away in my savings account. I graduated college and graduate school without student loans (or rich parents) by attending a fantastic public university rather than a fancy private one. My guiding financial principle has always been to live within your means.

  2. # 2 JenniLynn Says:
    June 5th, 2009 at 12:15 pm

    The biggest thing was taking Dave Ramsey’s Financial Peace University when I was 20.

    I also started having a checkbook and checking account when I was 15, so I got used to the concept of spending and balancing long before I was ever eligible to take out debt.

    I started working at 16 and was responsible for some bills that weren’t just “fun” things – gas for my car, paying over time for a trip I was taking (paying ahead of time), and so on.

    Another thing that I think often gets left out is that it is just my nature to be fiscally conservative, and I don’t like shopping, so that has been helpful.

  3. # 3 Revanche Says:
    June 8th, 2009 at 11:37 am

    From very early on, I always reveled in the act of paying bills because my parents let me write out their checks. That was probably the first real thoughtful interaction I had with money, and cemented my expectation that you paid all your bills when they came in. That meant you always had to already have the money on hand, else what would the check draw on?

    I also tried to tell my parents that they should be budgeting and setting aside money for household expenses instead of floating from month to month and putting everything back in the business. Since I was only ten they didn’t listen, but I’m convinced that if they’d practiced better money management that long ago, they would have been on a far better financial path.

    Instead, I took on their financial burdens less than ten years later and with the exception of my car loan, never had the time or money to take on debt! I was under too much pressure to make ends meet and pay off debt so it would have been completely illogical to build up my own debt.

    It was easy to see the effects of owing everyone money on my parents, and the bill collectors dunning my brother, so, for the longest time, nothing was as important as staying out of debt and paying off debt.

  4. # 4 Nelson Says:
    June 8th, 2009 at 4:22 pm

    Wow. I’m speechless.

    Okay, not so much. This is so bad that is warrants a whole blog post response.

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