Debt? Who has it?
June 12th, 2008 -- Posted in frugal living | 6 Comments »Now, I have to say, I’m flabbergasted by our modern culture of “buy before you can afford it!!” I have never bought anything that I didn’t have the money for. Yes, I have a credit card, but it currently has, and has had, a $500 limit for the last ten years. I only got it because I wanted to buy something online, and that is pretty much all I use it for these days, too.
I was brought up to work hard and save for the things I wanted. When I needed a new car last year because my 1986 Ford Telstar finally died, I used a few thousand dollars of savings to buy a 1997 Ford Fiesta. The thought of getting a car loan terrified the heck out of me. Why would I want to get a loan to buy a new car that would lose tons of value as soon as I bought it - not to mention that I would end up paying craploads more for it than the ’sale’ price, once you calculated interest.
I have one debt in my life - my HECS. For those of you not in Aus, that is the interest-free loan the government gave me to pay for my university education. It gets automatically deducted out of my tax, and will be paid off one day - I don’t really consider this ‘real’ debt, and either way, it was a most important investment.
I know that I’m approaching the time when I’ll have to get a mortgage - the thought of which really terrifies me. But, unless I want to be stuck renting forever, it’s the only way Nick and I will be able to get our own home. And so, it is good debt.
Going into 20% credit card debt to buy a phone/clothes/shoes/furniture/entertainment is bad debt. If you can’t afford these things, you don’t need them. This advice is from a girl who slept on a 2-inch thick foam mattress on the floor for three years because I had it, and didn’t really need a bed.
Make do, save your money, and you’ll be much better off for it.
I have to give thanks to Rhonda-Jean over at Down to Earth for the inspiration behind this post. Check out her post Tightening your Belt.




