Thursday, September 20, 2007

Debt Perspective?

Okay I was just thinking how funny it is I'm sitting feeling guilty for owing $1194 on my 0% credit card for my couch. I just paid $350 today because $230 was old couch sale and $100/month I determined each month is a bill. Yes it's a debt and it bothers me more now that ever having previously used a 0% CC. Probably because I'm blogging about it and it makes me feel like I'm cheating.

Then I sat back and questioned what the heck am I doing worrying about $844 of CC debt? I owe close to $500k between my mortgage and student loans. Can you see the disconnect? I owe close to half a million dollars and I'm sweating owing $844 on a couch?

Where is my perspective? Why am I not more worried about the mortgage and student loan? Why am I not killing myself over those two debts? I owe 2x the average mortgage of the US. I read many blogs about people complaining about their CC debt and I have mortgage more than 4x what someone owing $100k does. And I'm not frightened out of my mind?

This thought stumped and bothered me a lot. I nearly keeled over when I realized the impact of what we owe. We owe more than most people's CC debt, car loans, student loans, and mortgages combined. I think it's the fact that everyone is so focused on not having "bad" debt. That they forget that a mortgage is debt as well. That we don't own our house, we're just renting it from the bank. That we are using borrowed money to further our educations. Sure those are suppossedly good debt but it's still debt.

So anyone paying off debt will probably be crying out against my 0% CC, while cheering my enourmous mortgage as "good" debt. As necessary debt. How crazy is that?

I'm hopeful that things will get better and we'll be able to pay off our student loans before the interest ever hits. I'm saving money to maintain our home properly and our cars. I am using this blog to keep from getting "incomtitis" and adjusting our lifestyle to what our income is.

I guess I'd love to live large one day and who konws when that will be. But we're moving there one saved dollar at a time.


Anonymous said...

the difference is, the house you need (or at least, you need a roof over your head.) also, it's pretty near impossible to buy a house for $250k, the national average, in the DC area.

Also, the house itself is collateral for if you couldn't pay it. You could always sell it if you decided it was too much for you, and there'd probably be no stigma

The student loans, you have to pay regardless, and there's no collateral. But at least it's for something "practical" like school, and not a whimsical harley or something.

The couch bothers you because it was something you wanted (even though you probably needed it). This is where want and need get fuzzy, and it's the problem a lot of consumers have. Also, if they have to repossess the couch if you stop paying, that is embarrassing, and if you sell it you won't make nearly what you paid.

Trust me, I'm in the same boat as you (large DC-area mortgage, "good debt" student loans, etc.) and am always asking myself why I feel so poor. It's because I am!

Living Almost Large said...

Actually I have the cash set aside for the couch. Set it aside in June, but wanted to get a coupon discount of $100 and needed to put it on the store card to do so. So I did, then it turns out they offered 0% financing for a year, I was going to pay it off. And DH said why? And so I didn't and I feel so guilty.

fiscaldude said...

Your half a million dollars in debt? and your not worrying over 884 dollar 0% interest charge? Why don't you just save your money and pay cash? and don't say because your cost of living is too much....Your cost of living isn't high....Your half a million in debt...Stop making excuses for your lack of responsibility, stop taking on more debt, and pay off your debt!!!!!!!!!!!!!!!!

How come a light bulb didn't turn on in your head after you hit 100K in debt?

Living Almost Large said...

I am $450k in debt for the house. I have $17k debt for student loans for my DH's MBA.

The 884 is for a couch I have the cash to pay for. But we chose not to.

So I don't quite know why I am worrying when I have so much debt. And fiscaldude when you pay $450K mortgage for a townhouse then tell me I'm not in a High COLA. I don't have CC, car loans, etc. Because I live in such a HCOLA I can't afford it and house.