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When your debt feels like your arm

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“I’ve been in debt so long that it really doesn’t matter whether I pay it off in October vs. March.”

— A friend of mine who was talking about going on an international trip despite having $6,000+ in credit card debt. When I suggested NOT GOING BECAUSE THAT’S RIDICULOUS and putting the money towards the debt, my friend pointed out that it didn’t really matter when the debt was paid off since it had been around so long. I had never heard this perspective before and found it fascinating.

More stories from iwillteachyoutoberich readers about their debt.

[Update]: The New York Times asks, What is your biggest extravagance? and gets 400+ responses.

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26 Comments on "When your debt feels like your arm"

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plonkee
9 years 2 months ago

I too struggle with long timescales. I’m not paying extra on my new mortgage, because frankly paying it off 4 months early after more than 29 years is not exactly filling me with joy and excitement.
Fortunately for me, I have a very over-developed fear of being without money that means that I’m not in any sort of consumer debt – otherwise I too could be in the same situation as your friend.

Jonathan
Jonathan
9 years 2 months ago
I completely understand this mentality. I disagree with it and find myself fighting the same battle, so I can relate. The factor that nobody ever takes into consideration is the unpredictability of life. To say “October is fine to pay off my debt”. is fine if you know what will happen between now and October. Nobody knows what will happen or what life will bring. I have forced myself to pay off what I can, because there are always situations that come up which will make me wish I hadn’t done that six thousand dollar “thing”. A great financial counselor… Read more »
Plus6
9 years 2 months ago
I have seen many people with this same idea of procrastinating on taking care of debt and personal finance. For example, I had a friend that purchase a home in early 2005 with a 3/1 ARM. The ARM is about to adjust its rate with a much higher one and my friend is very passive on refinancing. I have mentioned, as well as many other friends, that he could be facing some much higher monthly payments if he does not refinance to a fixed rate very soon. It is amazing how some in this 20-something generation have more of a… Read more »
David Robarts
David Robarts
9 years 2 months ago
Paying off debt can be hard. It is important to be diligent about paying it off, but it is also important not to be too hard on yourself. If Ramit’s friend has been paying off his old debt for several years and the international trip is a unique opportunity now and the question is over completely paying off the debt this fall or next spring then I agree with the friend. If paying off the debt has not made significant progress in the recent years, the international trip could be taken later with a similar opportunity, or the time frame… Read more »
April D
April D
9 years 2 months ago
I kind of did this same thing, but I was also moving into a house that my parents own (no rent/mortgage), so I had a plan to start paying off the debt very quickly. I felt very guilty about it before we left, but honestly, after going, I don’t regret it one single bit. I’ll be debt-free in two months, and it was 100% worth it. At the end of my life, I get to say, “I was in Italy.” It was my biggest dream, and now all I can think about is going back (BUT, when I do go… Read more »
Neil Prasad
Neil Prasad
9 years 2 months ago

amazing; In reading the responses to others actually being understanding of Ramit’s friend’s comment, I think I’ve had an epiphany in understanding, or at least just seeing why people are ok with debt.
I just bought my first house and am more than excited to pay every month because of the awesome affect it has on my balance sheet. If I have one suggestion for all; it is to keep a balance sheet with your assets,liabilities,and owner’s equity and update it at least every week (I do it when I’m bored (so every day)).

Nancy
Nancy
9 years 2 months ago
I find this attitude toward debt common in the U.S. It’s one of, “Everyone is in debt, so yours is no surprise. Get used to it. And since everyone will always be in debt, what’s another $X?” It’s almost as if it’s a fait eaccompli. I have found in my journey to becoming debt-free that being frugal, being prudent actually angers some folks and makes others outright hostile. The reason: it makes them confront the reality of those attitudes, which is never very comfortable or fun. You mean I actually have to pay attention to what I’m doing, delay gratification,… Read more »
Woody
Woody
9 years 2 months ago
Being from the Netherlands, I have had some trouble getting used to the ease with which a lot of Americans just pile up debt without appearing to realize the repercussions. A few simple calculations will make it obvious very quickly how having to pay interest on a continuous basis affects your quality of life. While I agree that it is sometimes beneficial, if not necessary, to take out a loan or to carry a balance on a credit card, I don’t think it should ever become a habit. It is quite possible that there are immediate benefits to that trip… Read more »
April D
April D
9 years 2 months ago
Yeah, Italy would have always been there (well, maybe not Venice, since it’s sinking), but I would have always regretted not taking that trip. I had talked about going for years, and, considering the timing, I would have had to go then, or wait for at least 2-3 years. But, if I was barely making ends meet, I would have cancelled. I was living rent-free with a low-interest loan, I knew exactly when I’d have the debt paid, and I didn’t charge anything from the trip. So with that in mind, I enjoyed my trip just fine. By the way,… Read more »
JakeIL7
JakeIL7
9 years 2 months ago

I agree with all the sentiment about not spending what you don’t have; it is typically the best decision. But the amount of debt you have (unless it is extreme, which I don’t think it is in this case) needs to be balanced against living your life. So, in that vein Ramit and commenters, assume the following:

First, the trip is an isolated opportunity (he cannot put it off for a year)

Second, going on the trip will not increase his current debt

With this in mind, would you go in his situation? I probably would.

Starving Artist
9 years 2 months ago
Your friend’s response makes all the sense in the world. Debt creeps up, especially $6K in credit card debt–you’re always used to it. It grows with your ability to pay the minimum balance, and still live a decent life. It’s not the SMART thing to do. It denies you opportunities to go on even better vacations, with a bit of planning, or get an even nicer car, with some foresight. I still remember (with horror) the day my first credit card bill came in, and my dad sheepishly informed me I could ‘just pay the minimum’. Ten years later, I… Read more »
Moneymonk
9 years 2 months ago

What she is saying is true. People having been paying on credit cards and loans all their adult life to the point it is almost a memeber of the family. LOL

They see debt as apart of their lifestyle

Nicole
Nicole
9 years 2 months ago
I agree with you – an infuriating attitude, but not surprising. When I hear my peers talk about money they seem to look at “can I afford it?” to really mean “can I afford the monthly payments?” I don’t know if this is a once in a lifetime trip or not…but I think that really misses the point. Americans are NOT into delayed gratification so LOTS of things get defined as “once in a lifetime” to justify the fact that someone wants it and isn’t willing to wait. It is hard to think in terms of how much money you… Read more »
Mike
Mike
9 years 2 months ago
My wife and kid are about to fly on an unexpected international trip using tickets that were bought using our credit card. But the situation is justified: 1. We live in Japan and normally carry a zero balance on our credit cards. 2. Death in the family in the USA occurred within the past 48 hours. 3. Our “emergency fund” that we set aside for stuff like this will only cover about half the ticket cost. 4. We’ll immediately pay half the credit card debt with the balance of our emergency fund. 5. The credit card balance will be paid… Read more »
woody
woody
9 years 2 months ago

Mike,
I’m very sorry for your loss. In my opinion, this is a circumstance that totally justifies racking up some credit card debt. From your description of the situation, it sounds like you already made plans for how to get out of it, which is more than most others would have done under these circumstances (and I wouldn’t fault anyone for not planning ahead for things like this). My thoughts are with you and your family and I wish you all the strength you need to get though this hard time.

woody
woody
9 years 2 months ago
April, I did not mean to imply that going to Italy was the wrong thing to do. I don’t know the circumstances of your situation and it certainly sounds like you have your finances under control. What I do take issue with is people who just ‘put it on a credit card’ without having a plan to ever pay off the debt. My wife and I use credit cards all the time with the understanding that we budget to pay them off every month. If, because of unforeseen circumstances, we can’t, that’s OK, but we make every effort to get… Read more »
Sara
Sara
9 years 2 months ago
If you want a less expensive Mediterranean vacation, try the Greek islands in the off-season. I went to Italy and Greece in October last year (great for both!) and had the best time. The weather was warm enough for swimming/beach/hiking/outdoor stuff, but everything was less expensive, cooler than the summer, and a bit less flooded with tourists. I found hotels (simple ones, via hostel websites, but still actual hotels) on the beach in Greece for 18 euros per night (that was in Naxos, but Santorini wasn’t much more). I also found that if you go with friends who you don’t… Read more »
Spectralshift
Spectralshift
9 years 2 months ago

By the same logic, it doesn’t really matter if you go on a trip in October or March, right? Except that it’ll cost you less to do it in March, if only from the interest you’d save.

Not to mention that it won’t really matter if you pay it off in March or August, right? Or August or December or 2020…? If you can’t discipline your spending habits to pay off your debt in the present, chances are you won’t be able to do it in the future either.

April D
April D
9 years 2 months ago
Woody–I totally agree about keeping zero balances. My fiance and I are aggresively paying off any debt we have (by most standards, it’s not all that much) and we plan to build up a big emergency cushion before we buy a house so that we will never have to rely on credit cards again. Sara–I would love to find out more about your trip if you don’t mind. We are planning to do Greece and Italy in October ’09 (we went to Italy in October last year, and I really liked going at that time of year, too). We also… Read more »
April D
April D
9 years 2 months ago

“Life is short and I’d much rather see the world than drive a BMW or have expensive clothes.”

This has become my mantra. I am finally starting to control my impulse buys because after being in Italy, all the crap I spent money on seems dumb. I look at huge expenses and really think long and hard now because every dollar I save gets me closer to going back to Europe (or to Peru, or to any of the other places I long to go).

charlene
charlene
9 years 2 months ago
I understand this perspective all too well. In general, of course it’s totally appalling, but I was in appalling circumstances. I had credit card debts that were in collections, no, beyond collections. They were in the hands of lawyers who laughed at me when I made the suggestion of paying them back on a monthly schedule. So to reduce the amount of humiliation I faced when dealing with such debt collectors, I chose for several months to not communicate with them until I had enough saved up to pay them in full and hoped that I could get a significant… Read more »
quadszilla
9 years 2 months ago

I empathize with where your friend is coming from. In fact, I had a similar attitude when I was in college. “What difference does it make if I have $3,000 or $10,000 in credit card debt – I’m going to make so much money in the future that it simply won’t matter.”

Fortunately for me I was right. Although it did take me a little longer than I anticipated. . .

Getting rich and debt free is easy – all you have to do is make a hell of a lot more than you spend. 🙂

Dal
Dal
9 years 2 months ago

This runs along the same idea as “dying with debt is good”.
If you can extend the debt out far enough, it may never catch up with you if controlled.

A Million Paths
9 years 2 months ago
I was going to say something about how I agree and how debt is bad and blah, blah, but something really bugs me about everyone’s comments. Debt is the new fat. It’s just one more thing to be ashamed about and carry guilt about., and for other people to be pious about and to lord over other people about. I have a ton of student loan debt (no credit card debt), but I spent seven months living and teaching English in France. Maybe I should have stayed behind earning a bigger paycheck working to pay my debt. But I’d been… Read more »
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[…] Million Paths leaves this excellent comment on my recent post, When your debt feels like your arm. I was going to say something about how I agree and how debt is bad and blah, blah, but something […]

Eric Monse
Eric Monse
8 years 11 months ago

Debt is the worst. Nice article.

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