8 – end of an era, debt-wise

We have one last payment left in March, and my student loan will finally be paid off.  More than one-third of my adult life has been spent with that debt hanging over my head.

I never regretted a dime of it–that degree continues to open doors for me, but it’s often just to get my qualifications past the first gatekeeper and into the “we should interview” pile instead of the garbage can. Since I gained my degree, I’ve had jobs as varied as newspaper editor, website editor, flight attendant, fitness center manager,  consultant, and accounting manager. My bachelor’s degree is in interdisciplinary studies in writing and personal communication. Most interviewers don’t even ask.  It’s just a box they check that says, yes, she has a degree.penny

But, with the final payment on that loan at hand, it started me thinking about what debt is about, in general.  The fact is that debt defines us–and what we’re willing to go into debt to gain defines us even further.  I certainly agreed with my education  being in that definition.  Obtaining a car used to be the first time people went into debt.  Not arguing with that, as few people start their adult lives with money–and America is still too spread out to make it possible to get to work in most areas of the country without some sort of vehicle.  Nor am I arguing that going into debt for a house is almost impossible to avoid.  With the average house price in the US well over $100,000, it’s impossible NOT to go into debt for a home. And renting, unless you’re staying someplace for less than three years, is a mug’s game.  We dropped our monthly housing cost by $830 a month by buying this house.  That recovers our down payment in less than three years.

What I’m thinking about, though, is credit cards.  They blur that line between need and want in ways that we don’t even realize. Getting the “right” credit card has become the mantra.  Even with the simplification demanded now by law, they are completely confusing.  Web sites have sprung up to help you compare attributes–which one has the lowest interest rate, which one charges a penalty APR if you’re late, which ones have an annual fee, which don’t, which one awards miles for flying, which one has cash back for what you spend… it’s head spinning. It’s like the magician waving his hand over here, so you don’t see him palming that card over there.To add to that, as more people are beginning to realize, if you just pay the minimum payments, it will take you years, if not decades, to pay it off.

What’s been the hardest thing to get across to our kids is that the real question isn’t which credit card to get, it’s whether you should even get one.  Asking themselves THAT question means they’re willing to wait for that instant gratification of buying it now and risking the peace of mind of their future selves–and those future selves are going to end up supporting a lifelong debt habit.  From our own experience, if they end up in divorce court, they may also end up with all the debt that a four-person household incurred over the years. Bluntly, our society approves of being in debt, and indeed, requires it–and if you look at our government’s deficit, it is very clear that we’re talking about big debt.  By calling it The Deficit, we mute the message.  It’s debt.  It’s ginormous, beyond most of our comprehension–but what it basically means is that we can’t pay our bills as a country.

If there is one thing I could or would teach our children, it’s how to do it better than we did, both as individuals and as a country.  Unfortunately, the voices saying “buy it now!  Don’t wait! You know you need this!” are so much louder and so much more appealing than our message.  Our experience says “it took us four years to climb out of the hole we dug for ourselves,” and that’s not nearly as much fun, you know.

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