Monday, November 28, 2011

How Do You See Your Debt?

Debt. We all have it (ok, most of us have it). We all loathe it. That's why we read one another's PF blogs. To keep one another motivated to get rid of it once and for all. To learn to live within our means. To appreciate what we do have and keep one another accountable for our actions. It's what we do.

A debt is an obligation owed by one party to a second party but the term can also be used metaphorically to cover moral obligations. (from Wikipedia)

Debt is a means of using anticipated future purchasing power in the present before it has actually been earned. It is spending of funds we have not yet worked for.

When we use debt (a credit card for example) most folks think of it as a source of income. "I have $500 on this credit card that I can use to buy that thing-a-ma-jigger that I have been dying to get." But the truth is that the $500 credit limit is actually a loan, or a debt. It is a company saying that they will let you spend their money, at a cost.

I was reading another blog the other day and something struck a chord with me. $12 a day AND a baby on the way had posted about one of the many things she is eliminating from her life in order to achieve debt freedom and financial independence. In a bold blue, she wrote " If I owe someone anything at all, then until it's been paid back, my money isn't really my money ."

How true is that in our lives?

The level of my debt means that all the money I earn in the next two years effectively does not belong to me. It belongs to others who have extended credit or to whom I owe a moral obligation to repay. Two years. That stinks!

We have been downsizing our lifestyle and pinching pennies for so long, that I feel we have actually amended some of our bad habits of the past. We no longer frequent Tim Horton's, but with Candy Cane hot chocolate coming soon, that may change for a brief time. We no longer spend gobs of money on clothing, shoes, toys and other non-essentials. I, in particular, have learned new cooking and baking skills, learned to stockpile items on sale from the grocery store, taken on extra work whenever possible, and tried to be content with what we already have.

I hope that this is now the new 'normal' for us.


  1. I have student loan debt (and a lot) and I hate it. I wish I wouldn't have borrowed so much.

  2. Our big debt is our mortgage. I wish we could get it paid off FASTER but we're already pinched to the limit of what our housing costs should be! Our pay-off date at this point is Aug 2024... that's a LONG way away... exactly 12 yrs, 9 months. But we do have a warm home in which to live and make happy memories, so we are very blessed and fortunate.

  3. Yep I owe someone. Yep it's their money until it's paid back. If I could live without items for 5 straight months, I'd be debt free with them and all the rest of the money I make this year will be mine. I wonder if work would let me take a lump fronted amount....

  4. I see debt as a huge pain in the B**t. I'd like to own nothing right this minute, but since it took me years to get into this mess, it'll take me a couple to get out of it.

  5. I view our debt as a means to an end (we owe money on our mortgages), that allows us to *own* a house. But, like you, I have spent the last year trying to rationalize how much we pay in interest, & how freeing it would be not to have to pay interest to the bank. It would change our lives. So, we are decidedly more frugal than we've ever been (by our own standards, I guess) & I'm hoping that is a lifestyle change for us as well.

  6. 16 more months and my line of credit will be repaid. I'd like to make that a year but that's pushing it. I'll be really happy when the money I make belongs to me!

  7. I think this is a great way for everyone to live, debt or not. :) Keep on going, small steps! ;)

  8. You put this in a great perspective. I too have about 2 years of aggressive debt payment and then laying back a little. I'm not sure if the debt is to the credit card companies or to my mother really (she opened/used/maxed the credit cards on my name), but it will take and HAS taken me way too long to repay. I'm ready to be back in control of my money. It'd make me sick to think that all these days working hard and long hours are to make money that isnt mine (like working for free, somewhat!). Sucks. Cant wait to get out.