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Who Knows About Your Debt?

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To date, the only ones who know us personally and know about our debt are our parents and a few friends. Before I started blogging, no one knew. My siblings still do not know, and part of me wants to tell them and another part doesn’t.

When I first told my mom, she was a little surprised at how much debt we have, but it was fine with her. I somewhat expected that reaction because my parents have always supported me with anything I have done. They know that I may have rough times, but things will work themselves out. But still it never came up in everyday conversation so I never told them.

My siblings, on the other hand, I could probably tell them about my debt. But my concern would be the possible embarassment I could be to them if people that knew them knew about my debt. Probably silly to think that way…but I do.

I know debt is something that we shouldn’t be ashamed of. It doesn’t make us any less of a person. But deep down most of us in debt want people to like us. You think of someone rich having many friends and being popular. You think of someone in debt as someone poor. I don’t know if much can be done to get rid of those stereotypes since they are so prevalent in today’s society.

I think when it comes to sharing with others about your debt, there are a lot of unknowns out there on how people will react. After sharing our debt with a few people that know us, so far the fears have been unwarrented. In some cases, I’ve even found out that others have money woes too and I had no idea. Breaking the ice about debt has lead to conversations about finances that were not there before.

Can you imagine a group of gals discussing the best hairstylists now discussing the best credit cards for balance transfers? Just imagine how much peer groups can learn from one another in regards to handling debt and the support it can create.

All it takes is for someone to break the ice and start the conversation.


20 Comments

  • Reply Brian |

    I’m a firm believer that speaking about your debt, without specifics, to those you know, respect, and love is the best means of cleaning up you can get. With family and friends looking on you, maybe even guiding you, will help immensely.

  • Reply Basil Bizarro |

    I hid my debt like a meth addiction for years. I’ve slowly begun to include select loved ones, but it is hard. There is a fear they will think less of you, which is a fear I know I must get over. I’ve found nothing but support so far.

  • Reply Steve |

    I think the idea of personal finances as a taboo secret is one of the biggest mistakes our society can make. Without talking about your experiences, good and bad, how can others learn from them? For example, I talked with my in-laws about finances and found out they had a car loan from the car dealer at a very high rate. I knew he could go to his bank and easily get a loan with a much lower rate, which he did. If we hadn’t talked about finances, he’d still be paying the higher rate.

    On top of that, banks make an absolute KILLING from borrowing money from families and lending them to other members. I know of one case where one family member had a lot of money in GIC’s, and another had debt. The spread between the two was 2.5%, meaning the bank was making $5000/year for lending the one family member the other one’s money, and the interest the first received was taxable, while the interest the second paid was not deductible. For YEARS there was no communication until I got the family talking about where they were, and when they heard the situation, the first family member decided to lend to the second interest free. This was a HUGE help to the second family member (saving about $10-$12,000 / year in interest) and yet because of taxes the first family member was only losing $3,500 / year, and had more than enough money so the loss of that $3,500 meant nothing.

    Especially since personal finance is not taught at school, it needs to be something families talk about so the next generation learns before the credit card companies get them.

  • Reply Riverlark |

    When I learned about the higher interest that online savings accounts offer, I was telling everyone I knew. I was shocked at how many people didn’t care, and learned from some women that they didn’t even know what their mortgage payment was.

  • Reply Jim |

    I really don’t like to talk to my parents about finances or even financial advice because I heard about their problems growing up. The biggest problem when it comes to debt is having the money, and then some, to pay that debt back. I think if parents and schools focused more on personal finance, money, credit, debt, it will further benefits society.

    With that said, the apple doesn’t fall far from the tree. I had very solid views on money while growing up and saving, and then I went to college and experienced freedom. Those credit cards become a huge money crutch when you’re a young broke college student. Colleges should have a personal finance class as a required general elective to help students understand the gravity of money and debt.

    Regarding having debt as being poor, a friend of mine once pointed out to me that homeless people are more rich than us. I asked him why he thought that, they’re poor and have nothing, he told me the point is they have a net worth of at the least, $0. It’s an interesting way to look at it.

  • Reply Karen |

    I disagree about thinking that someone who is in debt is poor. I think alot of people with alot of debt look rich. Bottom line is they are living a lie. But you are right that it should not be a taboo subject. Money in general is not considered to be “polite” conversation; this is what, I believe, causes many to suffer in silence. I also agree that finances, credit, and “money 101” should be taught in school – high school. College is too late.

  • Reply AKB |

    My hubby knows about my blog and the people I comment on here on the pfblogs know about my blog. My blog isnt’ exactly telling how much debt there is and then again it is. Bad debt is too much debt in a lot of my friends views. As long as it keeps going down, it’s a success in my book and I really do not care who knows about it. I am accomplishing something in life and I am very proud of that fact. When I am debt free, I will shout it to the world, and they can call me crazy then too!

  • Reply basil bizarro |

    Karen –

    You make a great point – and one that I was thinking about tonight while running. I too think “money 101” should be taught in high school. I haven’t had a use for the quadratic equation, but money has played a MAJOR role in my life, as it does with everyone. What’s the deal? Why are we not being taught the mathmatics of interest rates and savings? IRA’s? Detailed classes on credit?

    We’re always told how important education is. Why are we being let out into the world financial illiterates? Some may say it’s the parents job, but come on – my parents didn’t tell me jack about money, probably because THEY weren’t taught about it.

  • Reply james |

    There’s a different balance for everybody, accorging to who the person is. Some people think debt is literally a deeply shameful thing, and if you are in debt but in control of it, keeping it steady with low interest rates and getting it gradually or rapidly to go down, you need not tell people who will not be supportive. If people want to tell all sorts of people about there debt, it’s like the therapy on this blog–some need to do it fully, as tricia does, disclosing all income, what you paid for what, but not everyone should work this way. I definitely disagree that High School or even College is ‘too late’ to learn these things, or plenty of people would have no hope.

    This can be something you can work on independently and with friends or you can do it as a sort of Alcoholics Anonymous thing. It’s a matter of taste, not always desperation. Also, I think I have heard of debt counselling that recommends getting student loans paid off BEFORE credit card debt. That was a while back, and I’m no expert, but it took me a good while to pay my student loans off, and with deferrals I ended up paying a lot of interest. but that’s been gone for some time. But I have no credit cards with a higher than 5.9% APR, and some are 1.9% or 0%. This comes from no late payments on anything over the years, but maybe people are being encouraged to pay off credit cards before they pay off student loans.

    One thing that should help some people is to see that even though there does have to come some moment of reckoning with credit card debt, that it really is just another form of loan, but one which is not usually presented the same way: It plays to the hedonistic side with adverts of vacations, home improvements, etc., or paying off other bills with cash advances, as if to say ‘all is well’, it’s really your money even though we know it isn’t and you do too, but don’t want to think about it now. Sometimes, credit cards are the ONLY way to get a loan, and for that they are not ideal, but perhaps better than nothing. The problem is not letting them feel like ‘easy money’, because they have the illusion only temporarily. When I had no card at all, a co-worker told me I was very stupid not to, because I might want to start a business or have some unforeseen need for some quick immediate money, and that without a credit card and some credit history WITH a credit card, the credit rating is not going to be as high. People who are able to NEVER have debt can talk about such things as how people with ‘zero debt with a credit rating of zero’ or such talk (I don’t know if that’s technically true, but someone wrote a comment here like that a while back), but the idea of having no credit rating is not very meaningful except for very rich people who are not going to be adventurous about anything–ever. So that some of the paying down debt does not need to be frought with guilt, panic, and overly conservative perceptions of the horror of carrying any debt. It is not true, of course, that problems disappear when you have no debt, just different ones are emphasized. Same as what I said about AA, and ex-alcoholics do tend to keep thinking about alcohol as central to their very being even when they’ve stopped. It seems to me a healthier attitude to get out of debt when you can, but not to panic about it unless it’s really gone over the precipice, in which case you probably can’t help it, and also not to expect life to be ‘better’ in any but a few specific ways when the debt is paid off. I’ve been in debt and out of debt, and according to whether you feel like you can control it, it ends up being still a matter of just dealing with different variables.

  • Reply MVP |

    Great post. After having lost weight on Weight Watchers, I kind of knew it was better to tell others about my goals (getting out of debt, in this case). I’ve found it’s one way to keep us accountable. Also, we’ve found something in common with some friends we never would have guessed were working to get out of debt as we were, so we became closer with them because of it. In other cases, I think sharing our “get out of debt” story made some of our friends uncomfortable and pushed them away. My guess is that they thought we would judge them on their personal finance choices, etc. As for telling our family, they’ve all known we’ve been working our way out of debt (it’s our excuse whenever we can’t go somewhere expensive with them), but we’ve stopped short of sharing dollar figures with them. I, for one, don’t want to hear any lectures from my parents, or to receive judgments about our former spending habits.

  • Reply Tim |

    i think if you put it out there, you cannot hide from you debt then. it forces you to do something about it. half the battle is admitting that you have a problem and actually doing something about it. i know it helped me just to confront the problem when i told people i knew that i was in trouble. i’ve been debt free now for 2 years and have another year before the major dings (i.e. those charge off’s that take 7 years to fall off) on my credit report are no longer reported. my credit cards are surprisingly only at 11% except the 0% ones i’ve been doing the arbitrage thing with.

    now that i’m out of debt, it seems that i have friends who actually talk about saving.

  • Reply james |

    ‘now that i’m out of debt, it seems that i have friends who actually talk about saving.’

    But within that, there is a touch of the shame about people who are in debt.

    In any case, I wanted to also say something about the comment on homeless people being less poor than debtors. Most will have obviously seen the conflict here, that homeless are no longer in the position of bettering themselves. People in debt who still have their health and homes are. And most people at this and related blogs have income and are paying off their debts. The ones who are the only candidates to be compared, and even then superficially, to actual homeless, are those who lose most of their income or all of it, and also have the debt. Most of us who have some debt, but can get to a support group like this should actually be grateful–which doesn’t mean we can stop working at chipping away at our debt, but we are not poor like people on the street, and if our debt is proving to be manageable and temporary, we are not poor, period (although we’re not rich, but that’s beside the point.)

  • Reply Vedis Teh |

    My family members do not know that we are in serious debt trouble.They only know that we are quite tight.
    They will only know if they find out my blog.But,the chance is quite slim.My family members do not surf the internet.
    In the meantime, we are really taking actions to reduce our debts.I have taken the advice suggested by you guys here.Thanks for the great articles written.

  • Reply Tim |

    james, i don’t get it. there is no shame. bottom line is that friends can change and the friends we have now all talk about saving etc.

  • Reply james |

    Tim–don’t worry about it, I don’t ever feel I really ‘know’ people on the internet if that’s the only place I know them, so I don’t know (nor need to) how you operate. What I was talking about in a general sense is comprehensible, and is parallel probably to moving to a better neighborhood or social improvement, etc. People in the same income brackets tend to be friendly more with each other, that’s what social classes are largely based on. I probably just had never heard it phrased as something social based on whether debt or savings were talked about. In any case, most people here are talking about both, and people like Tricia are talking about savings and debt reduction at the same time, which is what my main point was: It’s important to reduce debt if it’s too much, but I actually think zero credit card debt is overrated, unless you have no mortgage payments and student loans, etc. Even after you’ve paid off all the credit card debt, if you have a good bit of other debt, that’s considered normal enough. It may be just a realistic thing that most people change friends base on economic factors, but this is not always the case, say, leaving behind friends who are in debt (after you are yourself out of it) actually goes against what the whole idea of being supportive of those trying to get out of debt, which in some cases could be like leaving friends behind who don’t dress well enough or live in the best neighborhoods (as I said, I am not saying you do that, because I don’t know what you do, and though internet relationships are good for exploring and disseminating information, they don’t usually go very deep, and shouldn’t, IMO.)

  • Reply Colleen |

    I have always been interested in reading about finances, retirement goals, budgeting, etc. Strangely enough though, with all of that knowledge, we keep getting in credit card debt. It has been a vicious cycle for us. Home equity lines of credit and refinancing our mortgage two and three times to pay off debt was always the answer (at least for the last 20 years). A few months ago, I sat down and tallied up our debt. It came to around $44,000 not including house or car payments. I have been unable to bring this up with my husband. I have shared w/ him that things are tight and that we need to cut back – and this makes me feel guilty because he is not a guy who spends money on himself at all. If I shared the actual dollar amount with him he would be so stressed out, and since he is already in a very stressful line of work, I don’t dare make it worse on him. So basically, I blame our financial woes on myself and only myself. Since winning one of the Quicken programs from Tricia, I am diligently tracking our spending and see some improvements in our expenses. We are eating almost every meal at home these days and I like to tally up how much a really good dinner I cook costs in comparison to a dinner out. I am looking for more hours at work. I have worked part time for 10 years with summers off and need to get myself back into a regular paying job. We have put two kids through college, one starts in the fall and the fourth in two years. I am refusing to refinance the house or taking out any more loans, and I have stopped the balance transfer game. I think that is what got me in so deep to begin with. It’s therapeutic for me to be able to share my comments anonymously with people in the same situation!

  • Reply Vedis Teh |

    Colleen,I agree with you.Stop the balance transfer or just cut off the credit cards to avoid extra charges.

    I have cut off 4 out of 7 credit cards..going to cut another one. As for my hubby, he has left 2 with him (He cut off 4 cards)

    Though the cards are gone,the debts are still here.But at least we know that there will not be further extra charges from credit cards.

    We try to use cash now.

  • Reply Susan |

    I have mixed feelings about rather you should share your debt problems with family members or not. I have a sister and brother-in-law who filed bankruptcy after a two year long battle of trying to stay afloat with their finances. They lost two homes they own. It was a tremendous burden on the whole entire family not just THEM going through it. We all gave money to them and I loaned them one of my cars hoping my sister would go to work and bring more of an income in to help her husband because she wasn’t working when he lost his job. However, my sister’s health was too poor and her husband had triple bypass surgery and he wasn’t able to work. This whole incident caused my bipolar to go out of control and I was hospitalized twice in that two year time. It hurt me financially and now I am in debt. So I ask you does having a family member sharing their debt burden with the family help? It takes a toll on everyone. Every family member in OUR family suffered because of it.

  • Reply nancy |

    For me, and only for me, I choose NOT to tell my parents,siblings about my debt. The boundaries I choose keep me safe. I feel very secure not telling, of course my friends know, and I have never, ever felt judged. Telling them is so freeing just like this blog. Thanks for listening, and great insights here!

So, what do you think ?