Debt is a way of organizing your finances for future or present needs.. Debt can work wonders, if you calculate your future cash flows appropriately.. Personally, I would not go for debt if I am not certain about my future cash flows. And given an option would surely love to fulfill my needs with my present balances. But if at all I go for it, it would be a tradeoff between “Wants” and “Compromises”..

Read “Rich Dad, Poor Dad”.. It’s a must read, if anyone hasn’t..

My passion for my job has faded fast – long hours have denied me of a social life and, as an extremely social person, I struggle daily with the notion that I am literally missing my mid-twenties. Most, if not all of my close friends left college (with or without debt) and did what your friend did – traveled abroad, either teaching or simply exploring. Some have subsequently returned and are facing large amounts of debt, but they continue to pursue their passions and interests while working to pay down this debt. They may not have as much in saving as I do, but they have a wealth of amazing post-college travel experiences that I opted out on, AND a lifetime to work towards financial stability.

Meanwhile, I am trapped into a life that is increasingly surrounded by red tape and choices to be made around my finances, and as responsibility grows on the job front, my window to travel the world or enjoy my mid twenties is closing.

Knowing what I know now, I would much rather have racked up debt to have EXPERIENCES out of college, rather than do things “right.” I let my finances dictate my life choices and realize that avoiding debt may have cost me great times and great memories.

I am a living testament to the tone of this post and I would like to echo the authors sentiment to plan your life FIRST and worry about money second – ESPECIALLY when you are young (this tune changes as you age, of course). I am not saying to eschew financial planning all together, but there is a fine balance to be had, especially at this age, between planning for a financial future and enjoying the time in your life when overhead is so low that you really can afford to take risks, make crazy choices, and have amazing experiences, yes…incur debt!

Debt now could be the currency of great life experiences, just don’t get carried away.

For the record, yes I’m a twenty-something: I’m 27. I don’t think that, really this is about me, so I’m going to be short on details, but basically all I’m going to say is that I my debt is all student loans, I live strictly within my means, and I don’t own a car or any large consumer goods, I brown bag it almost everyday, and that my trip to France though it I didn’t kill any more of my debt, I also didn’t wrack up any new debt (the beauty of working abroad).

The point of my original post, was to reframe the debate. I am by no means championing debt, I think debt is a trap, but I think that being obsessed with money, or with not being indebted is another trap. I’m a big, big, big fan of the simple living movement – of figuring out the things you really want in life and actively pursuing those things. Those things generally don’t involve a big house, a big boat, etc. In fact those things are usually what you pursue when you work a lot at a job that makes you unhappy, or are otherwise unhappy in your life – studies have shown that it matters less how much money a person makes, and more how much a person makes in relationship to his peers (you can be very happy earning very little as long as the guy next door earns even less and as long as you’re all above the poverty line). For me happiness involves helping others, being able to meet my needs, traveling, and having control over my time.

I’m not saying (as has been implied) that it’s important to live for today and to worry about tomorrow, when tomorrow comes, simply that it’s important to live for today with the realization that tomorrow may not come, but also that it might.

I likened debt to being fat, not because I believe that being fat has no health repercussions, but because people use weight to be bigoted: to deny people jobs, to judge people, to make themselves feel better, etc. And increasingly people are doing the same thing with debt, and just like some of the most vicious critics of obesity can come from people who used to be overweight, it seems as though some of the most vicious voices are from those who used to be in debt. And both are treating the problem at hand (i.e. obesity, debt) as a moral issue instead of as a health/financial issue.

People kill themselves over having too much consumer debt (I’ve heard of several college students who have done this, in fact) because of the morality and horribleness we’ve attached to debt. I am *not* saying debt can’t be a problem, but people should never, ever, ever, kill themselves over money, and the attitude that I’ve found in some of the responses on some of these posts are so horrible (how can they be so stupid etc) it just makes me, quite honestly, want to cry. And lost in all of this judgment it seems is the point of money: to live. I was not saying that people could, or should finance themselves to the hilt so that they can buy flashy cars, or big homes, or to paraphrase a quote “buy things we don’t need to impress people we don’t like”, I was simply saying that lost in all this criticism of consumer debt, is just the point of what money is for.

I said that “your life dictates your finances.” If you want to vacation at five star hotels, and live in a manhattan penthouse, you’re going to either have to have a lot of money or a lot of debt. If you want to live more simply you can have a lot more expenses and a lot less (even gasp) no debt. Everyone ignored that.

Debting Thomas, I own Frontline’s the secret history of the credit card. I use it when teaching financial literacy to inner city high school students

Lastly, hypatia, I’ve read several of the books that you’ve mentioned, and several that you haven’t. I’ve also seen the Dave Barry show. I politely disagree. The book that changed, my life, was Your Money or Your Life by Vikki Robin and Joe Dominguez.

P.S. I’m a girl

I was in some student loan debt a few years ago. It sucked. I was paying down extra when I took off a year from school for an internship, and that felt good. I was getting somewhere. When I finally, finally stopped playing at grad school and got a job, after a year I was able to save, pay down student debt, AND travel.

It takes you a year and a half of consistent employment, living below your means, and saving to shore your finances up. Moving from job to job, going to school full-time, moving to another state … these are disruptive actions that will keep you from getting ahead and keep you frustrated.

I feel so much better now that I have positive net worth.

There is a great graph in one of the financial books I read in the library which shows that a family that saves 10% of their income every year has lower consumption for the first two or three years than the family with identical initial income which doesn’t save, but after about five years they not only pull ahead but start steaming along in their consumption leaving the non-savers far behind. This is because the savings start to create income, and in this example, the 10% savers spent some of the savings income. It is a very, very modest savings example–not super saving at all–yet it makes a HUGE difference in only a few short years. (I think the chart may be in the Automatic Millionaire, but I’m not sure.)

Read The Millionaire Next Door. Listen to the Dave Ramsey show. Read Smart Women Finish Rich. Read The Richest Man in Babylon. These books will change your life.

Btw, being in debt, just like being fat, does nothing for your self-esteem, no matter what your yesmen friends say. (Sure, they might be in debt too and supposedly loving it … but that doesn’t make opening your CC bill any better.) It also puts you at risk financially (just like being fat w/r/t your health). So, good analogy, bad conclusion.

I am sure you truly feel your response to your debt and the issue of debt in general is right. And maybe for today it is. But what about tomorrow? You will be shocked when you turn around a few times and you are 40 years old (or older, in my case) with kids, a pending retirement, parents who may need financial help, etc. Life is going to happen to you whether you want it to or not and you have to be prepared for it. Your comments indicate to me that you feel it is important to live for today because life is short and you don’t want to miss anything. In reality, that is a perspective that leaves you unprepared for the unknown which will be happening to you everyday starting tomorrow.

Debt for certain things in life today is reasonable. But I think you became a little overwhelmed with your debt and decided to change the way you feel about it instead of eliminating it. I hope for your sake you will rein that in somewhat and realize that failing to do nothing (or just the minimum) is not the best choice for your future. Remember, virtually every financial decision you make in your 20’s will affect you in your 30’s, 40’s and beyond. And doing nothing is a decision requiring action (avoidance).

Ron