Whether it’s a good idea and worth it or not…
It really depends on what you’re using the debt for and how much you value it. Everyone has something they spend money on that other people would think is a waste. Who am I to judge if someone wants a nice car, a remodeled kitchen, their own server farm, or a concert harp?

Personally, I would have no problem financing a really nice grand piano if I had somewhere to put it. Likewise, I have no problem financing the house to put it in.

Really, as long as you’re not financing a life style and making well thought out decisions when taking on debt, do what seems best to you.

Second, anytime you are planning for the future financial events, taking on more debt should be the last option put on the table, not one of the options to take off of the table. When you give yourself permission to think of debt as an option, it becomes accepted as a ‘responsible’ decision (which it is not). Under extreme situations it may be the only option, but treating debt as a viable option is not responsible.

I find that when I write about getting some discipline and using will-power to stop making “silly” expenditures some are offended and think I’m being preachy and as you say “Moralising”. Couldn’t be further from the truth.

I want people to be free of stress and financial crisis.

Choices and resources (or liberty) are the reasons why America is what she is. The very same idea of freedom and the American Dream is what gets people in debt in the first place.

The dream of driving a new car, owning your own home – giving your children and yourself the “things” we all want is about having choices and resources.

What the vast majority of Americans don’t understand is that the choices and resources don’t end with spending money. The same freedom of choice and the freedom to use unlimited resources is what will get them OUT of debt.

I don’t think most Americans truly appreciate how lucky they are to be able to have a public library where they can find information or use the Internet for free.

I am not saying we are getting a new car in the near future. We are running our current car into the ground. When the time comes for a new car, we’ll evaluate the situation. That could be 10 years down the road, and we may have a completely different financial picture than we do now.

I feel I’m just being realistic in saying that all options should be considered when faced with a problem. Financing a purchase is an option.

But as to house prices… look at the last 30+ years. The bottoms are flat: 3-7 years of flat. There is no need to be jumpy trying to time that one. When you start to see no change in price YoY, it’s time to shop.

Not a Realtor, no

When the economy tanked in 1981 there were speculators buying up Real Estate JUST after the worst was over – they made a killing within 6 years time.

The trick to buying now is choosing the RIGHT time, and if I knew that right time I would be rich. When I say buy now that all depends on the circumstances, where the property is, and what the property is for.

Ok….outside of that “it’s the perfect time to buy”

Uh, in 6 years or so, perhaps we’ll drag this trashed economy out of the dumps, and that will only be after a period of deflation that makes all debt increasingly difficult to pay off. But, yeah, other than that. Let me guess… you’re a realtor?

“3) No car loans, ever. Fix the junker and pay cash.”

Formerly worked in auto safety, so not a chance that would be our decision. Odds of surviving a side-impact collision from an SUV/truck when your car has no side curtain airbags: 50/50. No thanks. I’d rather live in debt than be dead or a vegetable. Side impact kills 8000 people a year and severely injures another 70,000. Interview with the crash test guy at the insurance institute discussing 2004/2005 models

1) Mortgage debt is ok IF it’s less than 25% of take-home pay on a 15-year mortgage

2) Student loan debt is ok IF you go to a reasonably-priced school and have the expectation of a decent income. No $80k loans for $25k public service jobs.

3) No car loans, ever. Fix the junker and pay cash.

4) No credit cards, ever. Unsecured debt means you’re spending more than you make.

All debts should be gone before a mortgage is obtained. The home purchase should involve a 20% downpayment, and the 6-month emergency fund should be fully stocked.

I’m not anti-debt, although I wish I could be. I just finished my long struggle of getting out of credit card debt and I celebrated by doing something that seems totally ridiculous – I went back into debt by purchasing an engagement ring. I’m not worried about it though b/c there is huge difference between the debt I just paid off and the new debt I just incurred – that difference is me. The whole experience has completely changed the way I handle my finances. If I would have purchased this ring three years ago it would have been “bad” debt b/c I would have been irresponsible. It’s different now though and I can safely say that I WILL NOT be late on any payments and I WILL pay the balance off before any interest kicks in. I will handle it responsibly.

To me, my main concern is getting my cards paid-off. Once that’s done, i’ll feel like a load has been taken off my shoulders. Even though I’ll still owe $40,000 in student loan debt, it doesn’t bother me because my education was a fantastic investment that serves me good every single year.

The only debt I’ll ever get is a fixed, 15 year mortgage that is a very modest percentage of my income. Sometimes a small amount of student loan debt may be justifiable, but it’s almost always avoidable if that’s a person’s priority. A part time job during the school year and a summer job equates to plenty of money to pay for a state school. Community college is very cheap and offers a chance to save to cover the last two years of college. I went to one of the top colleges in the country, paid for largely by being diligent enough to apply for grants and scholarships (plus having reasonable jobs during the school year and summer, including fun and convenient jobs like being an RA in the dorms).

I hope that everyone will consider doing everything in their power to avoid all debt other than modest mortgages. That’s how most American’s have lived until recent decades. And can we please get rid of car debt? Why go into debt for something that drops thousands in value the second you drive it away??

I think now is the perfect time to take on good debt, and a lot of it. The market is going rebound and when it does, those who have been smart enough to invest while the market is low and prime is low will reap the benefits.

We drove that car until it had over 160,000 miles on it. Probably the best deal I’ve had on a car.

Since cars lose so much value in the first 10,000 miles, I really think I will go this route in the future. It still seemed like a new car with only 13,000 miles on it and it still had quite a bit of warranty left.

So long as you have clearly thought out the alternatives, only you can decide, in the end, what is right for you. True, you’re blessed with having a choice in such matters, compared to medical bills or other instances.

But just because you can avoid debt doesn’t always mean it’s the best route. My knee-jerk reaction tends to be anti-debt, but there are always exceptions to that rule.

My husband couldn’t eat solid food anymore, after 28 years of steroids for severe eczema blasted his teeth. It’s a bit more of an emergency than a nicer car, but it was still a decision we had to sit down and make.

In the end, we went with a much more expensive option, since the dentistry school refused to put him under (only local sedation… for extracting the roots of more than 20 teeth!!!) and to get the dentures from a dentist who he really trusted. (Also, with all the free adjustments and helpful service she has since given us, she has more than made up for the price gap.)

There will probably always be a way to get something cheaper or to avoid going into debt. In the end, your major responsibility is to look at all the options, weigh the pluses and minuses, and figure out what works for you.

Houses – normally appreciate in value
Education – having one will sometimes bring greater opportunities and a better paycheck

Cars – depreciate in value… need I say more

I do not like debt, but if I had to, I would have debt on things that appreciated instead of depreciating.

However, you need to stop focusing on the debt and start focusing on increasing your income. You have made a start with your husband’s current full time employment. Although you haven’t mentioned it recently, I assume you are still working at the new business to increase its revenues and profits. If you can increase your net income sufficiently, all these other issues will become irrelevant.

With regard to the medical issue, if it involves a hospital, sit down with the business office beforehand and try to negotiate a price for those things not covered by insurance. It’s easier than trying to negotiate after they charge you full retail for what is not covered by insurance. Save up and pay cash up front for your portion since the work is elective. Use the same approach with the doctors who will be involved.

Like you said, responsible is the concept here. And full awareness of the total interest costs (a big lacking people have with cc debt. honestly, if the rules changed to better force each statement to illuminate the total interest impact of various payment amounts, fewer people could be in denial).

It’s too bad about the medical issues. Depending on what the procedure is, waiting can result in a more effective treatment later, because the medicine moves so fast. Also, if it is very expensive, you might look into medical tourism, where you go to cheaper country (New Zealand, India, etc) for the treatment and even with travel expenses, come out ahead. Just a thought. Really depends on the procedure.

Also, just in case you haven’t thought of it, you probably qualify for a medical savings account, so if you are planning on doing this, make sure you maximize your tax advantage too by putting enough money in it to pay for it pre-tax.

Good luck with the medical issues!

here’s a few good places to start
CC companies evil tricks

When Banks turn Evil

I’d suggust spending some time here as well

/www.creditmattersblog.com

I’d love to hear PF bloggers taking the companies to task for what amounts to leglized fraud.

I have a credit card in the 5% interest range with no late fees or over the limit fees and a few other goodies. I value my relationship with my current bank. My bank representative actually emails me and makes sure I am happy customer, a far cry from the rude employees of the big banks.

The number one lesson I take from my debt experience is to know who to go into debt with.