Comments on: Stories From Strapped: Debt http://thefinancebuff.com/2008/08/stories-from-strapped-debt.html like a friend telling you about money ... Thu, 19 Nov 2009 19:44:17 -0600 http://wordpress.org/?v=2.8 hourly 1 By: Sandy http://thefinancebuff.com/2008/08/stories-from-strapped-debt.html/comment-page-1#comment-1972 Sandy Sun, 03 May 2009 18:30:30 +0000 http://thefinancebuff.com/2008/08/stories-from-strapped-debt.html#comment-1972 Okay- so NO ONE plans on getting themselves into debt. It creeps up on you out of desperation to pay the rent or the electric bill etc.. It isn't always about buying a new computer or a big screen tv. My debt came from my insurance company dropping small group coverage (we own our own business) and I had already had my son- who was delivered via emergency c-section. Guess what? I got Blue Cross Blue Shield, became pregnant with my daughter and guess what?! A c-section is considered a pre-existing condition- SO we had to pay for the whole pregnancy- including another c-section. That was the beginning Then came a couple dental crowns and some problems with my daughters teeth. It just kept adding up. ANYWAY- it happens. The main thing is choosing the right way to GET OUT of debt. We did not fall for any of those get out of debt companies cuz no way was I gonna trust them to help. Instead we just refinanced our home for 4.75% fixed 30 year loan. We payed off all credit cards AND our car- plus our house payment dropped $700 a month and we are now DEBT FREE!! Other than the house payment- we can sleep at night and feel a complete load taken off our backs. Cards are cut up, debit card or cash is what we use now. If we don't have the money- we don't buy it. They did require good credit scores to get the low interest rate. So to anyone out there- this is a good solution for getting out of debt if you are able. Good luck!! Okay- so NO ONE plans on getting themselves into debt. It creeps up on you out of desperation to pay the rent or the electric bill etc..
It isn't always about buying a new computer or a big screen tv.
My debt came from my insurance company dropping small group coverage (we own our own business) and I had already had my son- who was delivered via emergency c-section. Guess what? I got Blue Cross Blue Shield, became pregnant with my daughter and guess what?! A c-section is considered a pre-existing condition- SO we had to pay for the whole pregnancy- including another c-section. That was the beginning Then came a couple dental crowns and some problems with my daughters teeth. It just kept adding up. ANYWAY- it happens. The main thing is choosing the right way to GET OUT of debt. We did not fall for any of those get out of debt companies cuz no way was I gonna trust them to help. Instead we just refinanced our home for 4.75% fixed 30 year loan. We payed off all credit cards AND our car- plus our house payment dropped $700 a month and we are now DEBT FREE!! Other than the house payment- we can sleep at night and feel a complete load taken off our backs. Cards are cut up, debit card or cash is what we use now. If we don't have the money- we don't buy it.
They did require good credit scores to get the low interest rate.
So to anyone out there- this is a good solution for getting out of debt if you are able. Good luck!!

]]> By: Rob A http://thefinancebuff.com/2008/08/stories-from-strapped-debt.html/comment-page-1#comment-826 Rob A Mon, 18 Aug 2008 18:55:20 +0000 http://thefinancebuff.com/2008/08/stories-from-strapped-debt.html#comment-826 "...we all have to make big purchases without the necessary cash on hand (i.e. new computer, refrigerator, etc.)..." I quoted that MSJW on 8.4 I'm not being judgmental and/or taking a holier than thou stance here, but this statement embodies why many people my age (30) have so much debt. We've all bought into this instant gratification thing and many of us can't discern our wants from our needs. "…we all have to make big purchases without the necessary cash on hand (i.e. new computer, refrigerator, etc.)…"

I quoted that MSJW on 8.4

I'm not being judgmental and/or taking a holier than thou stance here, but this statement embodies why many people my age (30) have so much debt. We've all bought into this instant gratification thing and many of us can't discern our wants from our needs.

]]> By: GHarri http://thefinancebuff.com/2008/08/stories-from-strapped-debt.html/comment-page-1#comment-812 GHarri Mon, 11 Aug 2008 21:00:49 +0000 http://thefinancebuff.com/2008/08/stories-from-strapped-debt.html#comment-812 Part-time work and a debit card is a much better way to get through college than credit card debt. Even a traditional student loan beats entering the job market saddled with a ton of maxed-out credit cards. Good thread about college and credit going on here: http://digits.hrblock.com/ssDigits/digits.php?rType=1&sPath=2441&sNode=2441&uId=294 Part-time work and a debit card is a much better way to get through college than credit card debt. Even a traditional student loan beats entering the job market saddled with a ton of maxed-out credit cards. Good thread about college and credit going on here:
http://digits.hrblock.com/ssDigits/digits.php?rType=1&sPath=2441&sNode=2441&uId=294

]]> By: TFB http://thefinancebuff.com/2008/08/stories-from-strapped-debt.html/comment-page-1#comment-808 TFB Sat, 09 Aug 2008 05:06:14 +0000 http://thefinancebuff.com/2008/08/stories-from-strapped-debt.html#comment-808 MSJW - The thing is even if I absolutely despise people who borrow a lot and consume a lot, it won't make any difference. I can shout all day but they are not coming to me for advice. Now, we have two choices: (1) Do nothing because they are adults and they have to bear the consequences of their own actions. But some people don't have that much self-discipline. They end up ruining themselves. (2) Set a boundary and don't let them screw up too badly. This boundary can only come from the government because the lenders are happy to lend to them and make a profit. That's why I'm in favor of legislating a limit on debt-to-asset or debt-to-income ratio. It turned out there's a third way. It's in the book <a href="http://www.amazon.com/gp/product/0300122233?ie=UTF8&tag=pucif&link_code=as3&camp=211189&creative=373489&creativeASIN=0300122233" rel="nofollow">Nudge</a> which I'm reading now. I will get to it in a future post. MSJW – The thing is even if I absolutely despise people who borrow a lot and consume a lot, it won't make any difference. I can shout all day but they are not coming to me for advice. Now, we have two choices: (1) Do nothing because they are adults and they have to bear the consequences of their own actions. But some people don't have that much self-discipline. They end up ruining themselves. (2) Set a boundary and don't let them screw up too badly. This boundary can only come from the government because the lenders are happy to lend to them and make a profit. That's why I'm in favor of legislating a limit on debt-to-asset or debt-to-income ratio.

It turned out there's a third way. It's in the book Nudge which I'm reading now. I will get to it in a future post.

]]> By: MSJW http://thefinancebuff.com/2008/08/stories-from-strapped-debt.html/comment-page-1#comment-794 MSJW Wed, 06 Aug 2008 21:08:01 +0000 http://thefinancebuff.com/2008/08/stories-from-strapped-debt.html#comment-794 TFB, I agree that you nor I are in any position to judge these people for making the choices that make the most sense to them. However, where I see your logic going down the drain is that you don't feel like you can tell someone that its wrong to carry a high debt-to-asset ratio, but you are ready for the government to tell all of us what we can and can't do. With that said, you are right on that there should be checks on debt-to-asset ratios, but does it have to be legislated? And Ted, thanks for laughing (I am glad that you are so debt savvy, and I am also happy to report that I am a debt free HOH of a young family just starting out), but I was trying to relate back to the individual case studies. TFB,
I agree that you nor I are in any position to judge these people for making the choices that make the most sense to them. However, where I see your logic going down the drain is that you don't feel like you can tell someone that its wrong to carry a high debt-to-asset ratio, but you are ready for the government to tell all of us what we can and can't do. With that said, you are right on that there should be checks on debt-to-asset ratios, but does it have to be legislated?

And Ted, thanks for laughing (I am glad that you are so debt savvy, and I am also happy to report that I am a debt free HOH of a young family just starting out), but I was trying to relate back to the individual case studies.

]]> By: serbeer http://thefinancebuff.com/2008/08/stories-from-strapped-debt.html/comment-page-1#comment-792 serbeer Wed, 06 Aug 2008 05:10:12 +0000 http://thefinancebuff.com/2008/08/stories-from-strapped-debt.html#comment-792 Oh-ho-ho. No constructive comments here, but I just wanted to let you know TFB that I really really enjoy reading your blog in general and this latest post in particular. Good old "Choices you make determines the life you live" (C) comes to mind. Oh-ho-ho. No constructive comments here, but I just wanted to let you know TFB that I really really enjoy reading your blog in general and this latest post in particular. Good old "Choices you make determines the life you live" (C) comes to mind.

]]> By: Ted http://thefinancebuff.com/2008/08/stories-from-strapped-debt.html/comment-page-1#comment-791 Ted Tue, 05 Aug 2008 14:26:51 +0000 http://thefinancebuff.com/2008/08/stories-from-strapped-debt.html#comment-791 I'm laughing at MSJW saying computers and refrigerators require debt. I purchased both of those this year without debt. By the way, I didn't get a computer or have home internet until I could pay cash. I still have the Dell at home that I bought in 2000. Also, I sold my old refrigerator for $150 on Craigslist this year to a young couple that was just starting out. Clearly these things can be done, I'm not the only one. I long ago put the kabash on wedding travel. I spent a fortune on that when I first got out of school. Then I made a rule that unless I'm in the wedding or its a member of my direct family I'm sending a gift. Clearly from these stories, people just feel entitled to live a certain way. That's fine, but there's a price to pay for everything. I don't get why people like the author insist we have to have a Mama (the government) to clean up our messes and take care of all our problems. I'm laughing at MSJW saying computers and refrigerators require debt. I purchased both of those this year without debt. By the way, I didn't get a computer or have home internet until I could pay cash. I still have the Dell at home that I bought in 2000. Also, I sold my old refrigerator for $150 on Craigslist this year to a young couple that was just starting out. Clearly these things can be done, I'm not the only one.

I long ago put the kabash on wedding travel. I spent a fortune on that when I first got out of school. Then I made a rule that unless I'm in the wedding or its a member of my direct family I'm sending a gift.

Clearly from these stories, people just feel entitled to live a certain way. That's fine, but there's a price to pay for everything.

I don't get why people like the author insist we have to have a Mama (the government) to clean up our messes and take care of all our problems.

]]> By: TFB http://thefinancebuff.com/2008/08/stories-from-strapped-debt.html/comment-page-1#comment-788 TFB Mon, 04 Aug 2008 23:18:40 +0000 http://thefinancebuff.com/2008/08/stories-from-strapped-debt.html#comment-788 @MSJW - I don't want to judge how other people live their own lives. Somebody accused me of being Uncle Ron Paul in the first post of the series. I'm not like that. I only want to see people live up to their own decisions. If Elaine wanted to go in debt for things she wanted or if David and Lisa thought attending friends' weddings is more important than debt on their credit cards, who am I to tell them they shouldn't? I can't force my lifestyle onto theirs. I only disagree with the book's author saying these young adults can't get ahead. Like I said, they chose not to. These are college educated adults. They know what they are doing. On the other hand, I understand people make bad decisions even by their own standard. Therefore we need to help protect them from their own mistakes. So maybe putting a limit on debt-to-income or debt-to-assets ratio isn't a bad idea. @John - I don't think having or not having usury laws makes any difference in these particular cases. The book didn't say the interest rate on their debt was unusually high, only that they had a lot of debt. @MSJW – I don't want to judge how other people live their own lives. Somebody accused me of being Uncle Ron Paul in the first post of the series. I'm not like that. I only want to see people live up to their own decisions. If Elaine wanted to go in debt for things she wanted or if David and Lisa thought attending friends' weddings is more important than debt on their credit cards, who am I to tell them they shouldn't? I can't force my lifestyle onto theirs. I only disagree with the book's author saying these young adults can't get ahead. Like I said, they chose not to. These are college educated adults. They know what they are doing. On the other hand, I understand people make bad decisions even by their own standard. Therefore we need to help protect them from their own mistakes. So maybe putting a limit on debt-to-income or debt-to-assets ratio isn't a bad idea.

@John – I don't think having or not having usury laws makes any difference in these particular cases. The book didn't say the interest rate on their debt was unusually high, only that they had a lot of debt.

]]> By: John http://thefinancebuff.com/2008/08/stories-from-strapped-debt.html/comment-page-1#comment-787 John Mon, 04 Aug 2008 22:40:51 +0000 http://thefinancebuff.com/2008/08/stories-from-strapped-debt.html#comment-787 We had usury laws, but the SCOTUS essentially nullified them. Not much historical perspective here. Just same old "caveat emptor". It worked for capitalism's first 400 years, right??? RIGHT??? We had usury laws, but the SCOTUS essentially nullified them. Not much historical perspective here. Just same old "caveat emptor". It worked for capitalism's first 400 years, right??? RIGHT???

]]> By: Evelyn Guzman http://thefinancebuff.com/2008/08/stories-from-strapped-debt.html/comment-page-1#comment-786 Evelyn Guzman Mon, 04 Aug 2008 21:57:25 +0000 http://thefinancebuff.com/2008/08/stories-from-strapped-debt.html#comment-786 Those are good suggestions for policy changes regarding consumer debt. The question though is how can we help make them a reality? You’re right, discipline is the key. There is really no need to get into so much debt. Buying things that are not really necessary is beyond me because by next year they have a garage sale on these items. It just doesn’t make sense. Evelyn Guzman Those are good suggestions for policy changes regarding consumer debt. The question though is how can we help make them a reality? You’re right, discipline is the key. There is really no need to get into so much debt. Buying things that are not really necessary is beyond me because by next year they have a garage sale on these items. It just doesn’t make sense.

Evelyn Guzman

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