There’s nothing quite as effective at discouraging the desire to go into debt as what I experienced in our early marriage. Granted, I wasn’t much for it to begin with; (debt isn’t a four letter word for no reason) but I am thankful for my lesson in debt in those early years before we had the opportunity to make too many bad choices.
I, always being drawn to money and how to care for it, had a job at the local credit union. (Note: Credit unions are awesome. Some time I’ll write up a post listing all the reasons but for now take my word for it. Go with a credit union.) At that time it was the real estate boom and I found myself in the mortgage department. (Remember that? Cash flowing, big smiles, bigger houses, everywhere. It was a grand time and, spoiler alert; that time came to an ugly, halting end and I had got out of the business just in the nick of time.) Being a small, honest credit union, we didn’t screw over our customers like a lot of places did; but we did benefit from the common idea floating around that, “Everything is great. Go refinance and get the most you can so you can grab life by the horns and live like there’s no tomorrow.”
Yes, I put that in quotes like someone actually said that exact thing but in reality it was just in everyone’s minds. Exactly like that. I swear.
So I spent my days consolidating people’s debt for them. The main part of my job was to take the list of debtors and obtain payoff information. We could then pay this debt for the people so at the end we could present the people with a squeaky clean credit report (and maybe even an extra check too)– except for one item:
They would owe all the money to us-
And all the future interest would be paid to us-
And if you don’t pay we get to take your house.
Again, I was at a credit union so I never saw anything shady. We denied so many people who had come in after hearing the phrase, “Everything in great. Go refinance and get….” because they really were in no place to refinance. I sure hope they didn’t just go somewhere else and get screwed over when things collapsed.
But I still saw so much debt. Technically the magical debt ratio numbers said they could afford it; but I knew, they would end up paying us for so very many years so much interest just because they hadn’t chosen to delay their earlier purchases until they could afford it.
And yes, we all knew it. As soon as many of these people with 10 different credit lines had everything cleaned up into one nice, neat home loan– they would go out and get more cards and just repeat the same behavior.
Remember that book? If You Give a Mouse a Cookie? The mouse starts out by taking one cookie and ends up expecting and taking more and more little things until he eventually takes even another cookie. Were these folks like that? Did they just take the consolidation and then continue to ask for another little thing, (“One credit card for emergencies”) than another, (“The hot heater went out. I’ll just open a Home Depot credit card…”) and another, (“…and I’ll set the limit a little higher just in case we run into more problems.”)
Now, please know that nothing I’ve said so far constitutes financial advice. In fact, oftentimes a refinance could be a very good step in the road to financial freedom. I don’t want to portray it in too negative of a light. I know that everyone didn’t use the refinance like that—or at least didn’t intend to.
But I saw so many people that had made the same choices (it seemed like everyone had a Kohl’s card) and were all in the same spot. They all wanted to make things better for themselves and we were more than happy to let them pay us interest. We made so much money from people just because they weren’t willing to do without and wait until they could pay cash and because we were willing to wait for our money to come back to us– sometimes double the amount we would pay for them.
From my perspective– behind the desk, behind the screen– I saw daily the ugliness that was consumer debt. It’s not as obvious when you are actually looking at all the nice stuff you’ve accumulated for being willing to obtain that debt. But honestly, we all know the ugliness is still there. It lurks in the background. It can steal your joy, keep you up at night and attack your relationships (the ones that matter the most.)
So here is my financial advice. Be willing to forego the shiny things. Be willing to deal with a little (or sometimes a lot of) discomfort. Be willing to not keep up with the Joneses. Unless you can pay for it all now in full, can you really afford the consequences?
In the years since I’ve learned the truth about debt, we’ve avoided it like the plague. (And it was not always easy. Man, I have so many other blog topics just bursting to cover!) And now we can enjoy those shiny, comfortable, comparable things if we want with no strings attached. In fact, we couldn’t even ‘re’finance our house if we wanted to since we don’t owe anything on the house anymore! It’s a great feeling.
Have you had dealings with debt that you are willing to share? Drop a note below and it will either inspire us or we’ll do our best to inspire you. I promise.
photo credit: <a href=”https://www.flickr.com/photos/wheremyarm/7749383/”>WhereMyArm</a> via <a href=”http://photopin.com”>photopin</a> <a href=”http://creativecommons.org/licenses/by-nc-sa/2.0/”>cc</a>