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Attitudes About Debt

March 3rd, 2014 at 07:49 am

[Gotta love the Lazarus add-on for Firefox -- this entry was lost in the 'catastrophic failure' of the server, but with one (right) click Lazarus was able to restore the whole thing! It's free, too, though the do occasionally ask for donations.]

I posted before that I have an indifferent attitude about debt. I just figure it's always going to be there, and now that I comfortably pay the minimums every month, I'm not too fussed about it. I'd like to get out of debt, sure, and I am working toward that -- but it's not a driving force for me, I'm not especially motivated to cut my spending down to nothing and throw every cent I have at the debt. I want to enjoy my life while I'm living it, within reason. (I'm not going to take a trip around the world or buy expensive cars, jewels, etc., but I might buy a $12 ring (marked down from $60, of course) just because I like it.)

I've been thinking about that lately, and wondering why my attitude is what it is. Part of it is my overall personality -- I'm not especially motivated to do anything, and would rather curl up on the couch with a good book than do most other things. (Translation -- I'm lazy!) I do think there are a few factors that have contributed, or at least if they were different maybe my attitude toward debt would be different, too.

My Mom Is Frugal
That's putting it mildly. Smile She returns food she doesn't like, she will drive to four different stores to save 25 cents on a certain item at each, etc. Granted, she was divorced and raising two kids alone in her late 20s/early 30s, back when being divorced was unusual. (Her parents were nearby, and a great help to her, but still, I know it wasn't easy for her.) She had to pinch pennies to keep food on the table, especially since child support was unreliable. So my sister and I didn't always have the trendy toys or the Jordache jeans (I'm dating myself now!), because we just couldn't afford them. (Don't get me wrong -- we weren't living in poverty by any means. We had a nice home in a good neighborhood, I never really knew it was a struggle to put food on the table until I was much older, etc. Plenty of people had and have it far worse than we ever did; overall we were still very fortunate, I know.) As a result, I think as an adult I subconsciously rebel against any restrictions on my spending, because we were so restricted when I was young.

No One Taught Me About Budgeting
By the time I got to high school, they'd stopped offering personal finance classes at all, much less making them compulsory. This is probably one of the worst ideas ever. (I know my mom could have taught me -- she probably tried, but I was a typical teenager and no doubt thought she was just 'getting on my case'.) So off I went to college, with no real idea of how to manage money and lots and lots of companies wanting to give me credit cards. Is it any surprise I was in over my head in debt well before I graduated? (And I didn't have any student loans, so I don't even have that excuse!) We inherited/bought my grandparents' house after they died, along with all of their 'stuff', and as we were cleaning things out I found several of my grandmother's "household budgeting" notebooks. Just a steno pad, and her records of where their money went, but it was fascinating. Every transaction was written down (well, almost -- my grandpa got a weekly lunch allowance, and that was the only tracking of that amount), a running balance of all outstanding debts, weekly savings account updates, etc. It was a fascinating glimpse into their life back in the 40s, 50s, and 60s, and also illustrated a clear schism between what she was taught and what I was taught about personal finance.

I Don't Have A Clear Self-Image
I think one of the biggest issues is that in my head, I'm still in my mid-20s. I have lots of time to pay off my debts, save up for retirement, etc. The reality is that I'm quickly approaching my mid-40s, and that 'far off' retirement age is a whole heck of a lot closer! This is probably my punishment for not having children -- at the very least, they insist on aging, so I'd have that constant reminder that I was aging, too. (I do have a niece now, whom I see fairly often, so maybe she'll help!) This is one of the reasons I'm overweight, too, of course -- I was skinny in my mid-20s!

A shrink would probably come up with some other, deep-rooted reasons for my nonchalance about debt, no doubt stemming from my parents' divorce when I was 3 years old. (My grandmother used to think I had abandonment issues because I use to put 'leashes' on all my stuffed animals. I assume that was actually just because I wasn't allowed to have a real dog.) To me, though, there's a certain amount of sense in the reasons I've listed, even if they're not especially deep.

*Update* There was a comment to the original post about retirement planning as a potential motivation to get out of debt. It's a good observation -- I have done some retirement planners, including the detailed one we use at work (I work in the financial services industry, ironically). There's such a wide variety there, of course -- about a $1.5 million difference in what they estimate I'd need to retire, depending on the calculator. So in some cases I'm doing well, in others I'd have to work until I'm 77 or so! I do stand to inherit a decent amount at some point; I don't want to depend on that, of course, but at work we do always include inheritances in our retirement projections. I'm estimating it low, without accounting for long-term growth, and subtracting the money I owe against it (which ideally will be paid back well before then). With that, I'm in good shape, but again, I don't like to depend on it. So perhaps I'll work on a 'motivation board' for our retirement, and link it up to my debt-repayment plan. Thanks for the thought!

9 Responses to “Attitudes About Debt”

  1. ThriftoRama Says:

    Hey. I still love Jordache jeans. They're good for tall ladies like me.
    Often, the pendulum swings. My hubby's parents are the cheapest people ot ever walk the earth, and spent probably too much time shopping for each and every purchase. Dh now hates shopping around, because he has other things he wants to do with his time. He's also the king of pay someone to do it. So yeah, it's no surprise your reaction to your mom's penny pinching is to not care as much. It's probably just associated with being bored or annoyed as a kid.

    Of course, paying the minimum is probably the wrong attitude. If you need to be motivated, you might want to instead see how much it's costing you to only pay the minimum (as in, what you're actually paying for all that stuff you bought, in interest, should you every pay it off). That can be an eye opener.

  2. doingitallwrong Says:

    I didn't know they still made Jordache jeans, actually! Thanks for the input -- nice to know I'm not along in the "rebelling against the parents" thing. Smile

    I do pay more than the minimum now, on one card (doing a snowball thing) -- what I meant there was that I'm not longer struggling just to pay that much. Keeping tabs on what it's costing me is a good idea, though -- I've set up my Excel spreadsheet to show me how much I knock off the total debt each month, which is gratifying. You're right, though -- adding up the amount of interest I'm paying every month is pretty eye-opening! (And a little depressing, to be honest, but then I think of how good it will feel to see that number decreasing.) Time to update my spreadsheet -- thanks again!

  3. Nika Says:

    Whatever the reasons, you can do it now. You are adult. You have access to a computer and calculator and don't need to be a math wiz. It is simply about facing reality.

    Debt means you are spending more than you are making, and that is a distressing concept because that scenario does not allow for someone to get ahead.

    Everyone wants to enjoy life. It is a misconception that you enjoy life less if you are responsible.

    If I make the same salary as, say, Jane, and I wait to buy my stuff until I have money and Jane buys it on credit, I will pay 18-27% less for it overall, and can have that money to enjoy something else with. If I have a better credit score as a result of having no debt, and saved a downpayment, I will get much better mortgage rate (significan difference that becomes huge over the life of the loan), I will pay less for my car, for my car insurance... All that money can be enjoyed now or saved ("saved" means it is allocated to be enjoyed in the future).

    So all it took is perhaps few months of patience at the beginning, but I can reap the benefits of that bit of delayed gratification for decades, by having more money available to me every month than the "I want it now" Jane will have.

  4. PatientSaver Says:

    Very interesting story about your grandmother's budget journals. I imagine someone may find mine someday and think the same thing.

    As a single woman, I find that my "singleness" is extremely motivating to me to save for retirement. Because basically, no one else is going to do that for you.

    I hate to burst your bubble about inheritance, but the odds are that at least one if not both of your parents (or whoever you think you will inherit from) will not die a sudden death. Doctors have become very good at saving lives these days, but they're still not that good about curing chronic illnesses like dementia or Alzheimer's. It's much more likely that your parents are admitted at some point to an assisted living facility or a nursing home, both of which will suck up whatever assets they have very, very quickly under Title 19.

    The average nursing home costs, what, $90K a year? The only way to avoid that, again, aside from dying quickly, is if you can take in a parent or two and care for them yourself. Or, if they give you their money at least 5 years before they have a need for extended medical care in that type of facility. But who's going to want to give up their money, and control over it, freely? They may rightly feel they may need it and not want to give it away to children, even if those children have the best of intentions. Just something to think about.

  5. snafu Says:

    Do you know TV finance personality Suze Orman? I happened to catch a bit of her promo for PBS yesterday afternoon and she talked about you as though she had read your Blog and knew you personally. .She said it was important...'to plan how to use your money before you spend it.' I didn't get all that she said but it was something like...it's not a good idea to spend your future for items you use up in the present to make a mess of your future.

    I'm in awe of your gran's financial notebooks and wish I had something that tangible. Our gran taught us easy frugal [her word] but it only stuck to my mom and I. Having a financial 'journal' from mid century to compare with current percentage of income disbursed for day-to-day operations. What percentage spent on needs, wants, savings.

  6. doingitallwrong Says:

    Thanks for all the great input! I do want to clarify that I am not buying anything on credit these days; almost everything goes on the rewards card we pay off every couple of weeks. It is a good point about the inheritance and nursing home costs. We have talked about transferring the money over the the next several years, and about long term care insurance. We're having our annual "family financial conference" in the next few weeks, so I'll be sure to bring it up again!

    My grandparents really were the model of doing it right -- I wish now that I'd paid more attention when I was younger, although I don't recall them ever purposely trying to teach me any financial lessons. They also saved *everything* -- a side-effect of living through the Great Depression, no doubt. When we cleaned out the basement we found bags full of clean-but-used straws. I sometimes have that "I can't throw that out, I might need it some day" mentality, but straws? I'm not quite that bad!

  7. Joan.of.the.Arch Says:

    The grandparents may have had more imagination regarding the straws than you give them credit for. When I was a child in the 1960s, parents at my friends' school and in my own Girl Scout troop were asked to wash and save plastic straws and paperclips for a kids' craft. The straws were cut to about one inch sections and a paper clip inserted. The clip flattened out the straw in a perfect fit. The straw covered clips could be linked together to form colorful necklaces, jump ropes, lanyards, bracelets, zipper pulls, etc.

  8. doingitallwrong Says:

    That's very possible -- they may have been saving them for future great-grandkids!

  9. Permanent Temp Says:

    I find this interesting because my parents struggled too. I was somehow always aware of the struggle not wanting to cost them too much money the only thing I'd splurge on and still do is meals and treats.

    My parents did not have good credit so when I was in college I took a personal finance class so that I would know what I was doing before I was in trouble. Even though I learned good habits and facts I couldn't really put my money there yet. I still tried. I opened up an IRA at 18 and put a few hundred dollars in it. I haven't been able to put much more in there til now.

    When I was in my early 20's I lived off my credit cards and "accepted" the debt since my major left me no time to get a decent paying job. I worked to pay my minimums and used left over student loan cash on semesters I couldn't work. That attitude stuck around a bit after college as I thought I'd never have a high paying job or a permanent one. But after being laid off of that job I smartened up a bit, and the next lay off really helped lit a fire under my butt.

    At this point debt wasn't something I could take care of "some day". It was something I had to eliminate in order to make it when I'm not gainfully employed.

    Perhaps as your lifestyle has been someone stable and and so without children, or other financial struggles you haven't had to really face any challenges since you were younger and knowing you have that inheritance coming you haven't had to had a reason to hustle for your future either. Your attitude toward debt is much like my attitude has been concerning fitness. I hope both you and myself can understand why we feel that way and work with it to find a happy medium where we can still get something accomplished. I'm now in my late 20's and would like to have a better fitness, food routine before I'm 30.

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