2. The car note came from ignorance. Our clunker died and we decided to pick up a used rental car. Great price and everything, but it was more than we could afford and I was too proud to admit it. We made a bunch of mistakes (negotiating based on monthly payment instead of total price, little money down, buying quickly, accepting a loan we didn’t fully understand). The credit card hit came from a few months emergency depleting our emergency fund, followed by some anxiety based shopping and fast food binges.

3. The car note for about four years of slowly chipping away at it, the credit card hit is brand new and still only a strong possibility.

4. Slashing the budget over the next few months to get rid of the credit hit, then if the budget proves livable supercharging the emergency fund and then throwing extra cash at the car loan.

5. “My debt makes me feel inadequate and foolish.”

6. I would have saved much more when I was living at home after college with a good job. I full on decimated my student loans, but treated all other income as “fun” money instead of thinking about building a good financial foundation.

As for me, we were actually under contract to buy a house with a mortgage until I decided to go to business school in another state and we pulled out. The mortgage was a way to keep our assets diversified and the rate on it was like sub 4% fixed for a 15 year so the cost was not high especially if we pre-paid it. So I totally believe that debt can have its place in my finances as a source of leverage, but I just approach it with a good dose of skepticism. Don’t know when we might try next to buy real estate but depending on the circumstances it could either way, mortgage or all cash. Let’s just say that I like having the option of doing either and deciding on a case by case basis.

@Christine – Awww, you can do it though Christine – you know I have faith in you! Sucks about divorce stuff, I”m sorry :( Sending you positive vibes!

How did you get it? $27,165.99 is SLs (really amazed at the amount of debt in the comments is attached to SLs!)…that and irresponsibility for not paying it back in full each month.

How long has it been adding up for? A while. Actually, I consolidated all my loans, excluding SLs, and have been paying that off. But a current divorce had me buying a new (ya, ya…went for the top of the line) washer/dryer and taking out a loan to cover living/child care expenses for a while (don’t ask where I took the loan out).

What is your current plan for ridding it? Actually, I am considering selling the new washer/dryer set to pay back that credit card. I will buy a refurbished set for a few hundred. I am getting a roomate to help pay down my debt. And making the children get a job (j/k on the last part).

Finish this sentence: “My debt makes me feel _____.” Like I will never grow up because it keeps me from taking those nice vacations or buying a house, etc… It doesn’t allow me to afford the lifestyle I want. Or I should say it doesn’t allow me to own the lifestyle I want.

**Bonus** If there was one thing you could take back over the years (re: your debt), it would be? Never Ever to have opened or misused that checkbook I got when I was way younger. I thought it was okay to bounce checks. Started off on the wrong foot.

However, I would caution against going “hardcore”. That really makes it sound like you are thinking about living like a pauper to put every penny towards your mortgage.

I have read many comments about people that live this way (what I would call excessively beneath their means). And not to discourage fiscal responsibility, but I believe that you should seek balance in life.

I attempt to find a balance between planning for the future and enjoying my life in the here and now. I don’t have any debt except my mortgage. And I put 16% of my pay into my 401k (plus employer’s 6%). I have a significant EF if you include my gold and silver investments. And I’m starting to accelerate payments on my mortgage. But however much I love my future self and don’t want him to eat cat food when he retires, I also want my present self to live a full and enjoyable life. I mean otherwise what’s the point?

My major outlet for recreation is my motorcycle. I take several trips a year with multiple groups. I try to minimize the cost so I can take as many trips as I can and I don’t go into debt to go on a trip. But I probably spend $5,000 – $7,000 per year on this “hobby”.

If I sold my bike, put that money and the majority of my discressionary income towards my mortgage, I could have it paid off in about 8 years (versus the 14 years I have planned). But that would be 8 years of missing out on an activity that I derive a great deal of enjoyment from and share with many friends. And back of the envelope calculations show that I’d only save about $20,000 – $25,000 in interest over that period.

Overall, I do take the long view of my finances. But I don’t sacrifice everything now just to be richer in the future. Also, where does it stop? Once you pay off the morgage, you could put all that extra money right back into investments. After all, you are already used to living like a poor person now. At some point you have to find your balance. Otherwise you are just accumulating wealth for your beneficiaries. (cue the family fighting over your estate)

My ex’s father is that guy. He had a 6 figure income while she was growing up (back in the 70’s and 80’s when it really meant something). Their house was paid off when she was a toddler. If he’s not worth at least two mil by now I’m a chinchilla. They had a lot of money but you wouldn’t know it by his behavior. He forced them to walk on the sides of the steps to make the carpet last longer in the middle! (she dislocated her finger when she fell once because of this). He bought all generic food and would actually sew the elastic band back into his tighty-whities when they fell apart (multiple times – I don’t know what his criteria was for finally ditching his old underwear, but DAMN!). From the way he treated money you would think that he was raised during the Great Depression. Why treat yourself that way? And especially why treat your family that way? It goes way beyond being responsible financially. (and who wants peanut butter you can pour out of the container?- Yuck!)

I look at it this way, how would I feel if right after I sacrifced everything and reached whatever arbitrary goal I set I got into an accident and was lying there dying. I know that I wouldn’t be thinking “Gee, I’m sure glad I got my mortgage paid off early” or “Glad I’ve got that $1,000,000 in the bank”. I would be sad that I didn’t enjoy the fruits of my labor more.

Given (what I consider) my balanced lifestyle, I of course would not be thrilled to be shuffling off my mortal coil. But if I died tomorrow, I wouldn’t feel like I cheated myself out of having a full and rich life either.

James Dean sums it up nicely:
“Dream as if you’ll live forever, live as if you’ll die today.”

After all, our financial planning is just a dream that we make happen.