Author Topic: Debt Culture  (Read 627 times)

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Offline Michael Hardner

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Debt Culture
« on: January 17, 2020, 06:49:14 am »
Have we done this?

Explain your personal relationship with debt, in the context of how it lives in YOUR culture.

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Offline Michael Hardner

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Re: Debt Culture
« Reply #1 on: January 17, 2020, 06:58:13 am »
I graduated with $2K of student debt but never paid attention to money until I hit 30 and realized that I had no real savings.

I took a series of freelance jobs that paid more money and immediately saved about 6 months' pay for RRSP.  Cool so far. 

Then my field was offshored and I was out of work for about a year.  I spent my non-RRSP cash on hand and gave myself tax problems.  I had to pay off the taxman using a line of credit.

I then begged for a job paying what I had made ten years earlier, maybe 1/2 my previous pay.  I was lucky to get it.  And now my debt represented 6 months of my new salary.

Stupid moves but I vowed to be smarter moving forward.

Joan and I put a bit more on the line of credit for our honeymoon and her education, and since then have been paying down with the exception of the mortgage.
« Last Edit: January 17, 2020, 07:06:15 am by MH »

Offline Michael Hardner

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Re: Debt Culture
« Reply #2 on: January 17, 2020, 07:02:27 am »
We now keep $20K on hand for car and house emergency.

We could conceivably live in austerity on one salary.  And we both get cost of living increases to our base.

So my story is titled: Risk Averse Guy Gets In Trouble... Adjusts His Safety Vest
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Offline wilber

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Re: Debt Culture
« Reply #3 on: January 17, 2020, 03:23:04 pm »
Being a Geezer, I did a lot of my growing up when there were no credit cards or ATM's. Lay away was still a thing. You would go to a store, get them to put an article away and they would keep it for a certain length of time while you made payments until it was paid for. I would have to plan on going to a bank (when banks kept banker's hours and weren't open on weekends) for cash before going on a trip and would then have to buy foreign currency at an airport or other exchange instead of just going to an ATM for local cash or using plastic when i got there. It took some planning. Things are much more convenient now but that convenience also makes it much easier to burn through money.

I also grew up in a family where debt was frowned on and my wife is a Scot so she is even worse. As a result, we have always paid off every loan before it was due and have never carried a credit card balance. This has been a double edged sword as debt aversion has also caused us to pass on a few really good investment opportunities.

I have also been very fortunate in that I have had some unique employment opportunities and give myself credit for taking advantage of them. I have always been employed even though we have moved across the country and back and I have gone offshore a couple of times to stay that way. I also made enough that my wife could take 12 years off when our children were young even though things were a bit tight. I was also fortunate in that I lived in a time where that was still possible, it is much more difficult in this day and age. As a result, while I cringe at the amount of debt I see some people carrying, I try not to be critical, although many also seem to have nicer homes, vehicles and vacations than we did at that age. Our idea of a vacation was two adults, two kids and a black lab in a 1972  VW Westfalia with a canoe on top, towing a trailer full of stuff, heading for somewhere in western Canada or northern Washington for a couple of weeks.  I'm also very fortunate in that I have a company pension, although it is not indexed and I haven't had a raise in 13 years except for CPP and OAS indexing. My investments are my indexing.

All in all, life has been very good to me so far.
« Last Edit: January 17, 2020, 03:28:43 pm by wilber »
"Never trust a man without a single redeeming vice" WSC
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Offline Michael Hardner

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Re: Debt Culture
« Reply #4 on: January 17, 2020, 04:03:37 pm »
What do you do?  Or did you?

Offline wilber

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Re: Debt Culture
« Reply #5 on: January 17, 2020, 05:24:34 pm »
What do you do?  Or did you?

Aircraft maintenance engineer, then flight engineer, then pilot. I was lucky enough to work for a company that gave people the opportunity to do all three if they got themselves qualified. Almost unheard of in the airline industry.
"Never trust a man without a single redeeming vice" WSC

Offline Super Colin Blow

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Re: Debt Culture
« Reply #6 on: January 17, 2020, 05:30:57 pm »
As many Americans do, I had some credit card debt. I finally contacted an agency that helps pay off the debt and lowers the interest on the cards. Eventually, one of the companies I owed money to gave me the opportunity to settle for less, and we talked 'em down to $1,500 (the remaining balance was still another $5000 or so) and I paid it off.

I then became more careful about debt. On a $9.58 an hour job I managed to save like, $6000 in a few years once the debt was gone; rather than ever getting into debt again.

However, there's still student loans. But under my current circumstances, I can defer or get income-based repayment.
WAR IS PEACE
FREEDOM IS SLAVERY
IGNORANCE IS STRENGTH
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Offline Omni

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Re: Debt Culture
« Reply #7 on: January 17, 2020, 08:06:59 pm »
I've only been to Las Vegas one time. Went with a few work buddies to take in the aircraft expo that was going on. By the end of day two I was down ~ 3K US, and I tried to not to even were the exchange rate had me in Can. dollars. And that was back when 3k was 3K. I quit sipping that free booze, focused, and sat down at a poker table and by the end of day three I was even Steven. That was my first/last visit to Vegas, and the last time at gambling beyond penny ante. I lucked out day four and got hired to do a quick ferry trip right back to Canada so at the end of the day I had a little extra jingle in my pocket. The lady of the house asked me how the trip went. I withheld some of the details. 
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Offline Michael Hardner

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Re: Debt Culture
« Reply #8 on: January 18, 2020, 05:23:07 am »
Cool story, but is that the full story of you and debt?

Offline kimmy

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Re: Debt Culture
« Reply #9 on: January 18, 2020, 01:08:54 pm »
The only debt I have is my mortgage.  I bought my 1br apartment at the end of 2011, and I now have my mortgage down to 5 digits, while the place itself is now worth at least 1.5x what I payed for it (according to the city appraisal I got this month.) 

I have a line of credit that I use sparingly.  When I got my current vehicle, I needed to add about $3000 on top of my trade-in. I used the line of credit to get the money, and paid it off over a few months.  The line of credit has a very low interest rate compared to credit cards, so I have also used it to fully pay off my credit card after a couple of major purchases, then paid down my line of credit afterward.  My line of credit almost always stays at a $0 balance.  I have used it to pay for things like work on my vehicle and to buy RRSPs.   

When I first came to Kim City in 2007, I had only my clothes, my cat, a computer, and various odds and ends, basically everything I owned fit into mom's minivan (which I "borrowed" for the trip.)  While I was getting established I accumulated some debt, but managed to pay it off.

My vehicle is a 2003 Nissan Pathfinder that I've had for almost 4 years, bought from a used car lot. I paid for it with a trade in and $3000 cash. I've never financed a vehicle, or anything aside from my home.  After I got here my dad and my long-time special guy came to see me and make sure I was okay, and they took the minivan home with them, but my guy bought me a beater vehicle to help me get around for work and so on.  It was a 1996 Malibu, and cost $1200. He also gave money to help with expenses while I was getting settled. I paid him back as soon as I was able. I've "upcycled" a couple of times since. The Pathfinder is actually very nice despite its age, and is tank-like in terms of reliability and power.  It needed some work done, but I've been lucky to find a really trustworthy mechanic.  It has had new everything since I bought it-- tires, brakes, shocks, belts, and everything else that wears out-- but has needed only a couple of minor repairs that don't fall under the heading of replacing worn out stuff.

"Upcycling" has been my process for other stuff too, especially furniture, housewares, and clothing. I made do with pots and pans and small appliances I bought at garage sales and Value Village for a long time.  I've upgraded to nicer things when the opportunity struck-- a clearance item on sale, a great find at a garage sale, and so on-- and given my old stuff back to Value Village for someone else to enjoy. I used my $4 Value Village toaster oven for 8 years, bought a new one at Canadian Tire when they had it marked down to 70% off for some reason, and gave my $4 toaster oven back to VV... some other cash-strapped person is probably still using it today.  Value Village is also my primary stop for clothing.  I go there to scoop up nice stuff and turn in stuff I'm tired of pretty regularly.    Aside from the price, I just like the stuff there better.  I don't care for a lot of stuff I see in stores, and feel like buying well-made second-hand stuff from yesteryear has allowed me to create a unique style that suits me better than whatever is in fashion at the moment.


I think buying new things (vehicles, clothes, furniture) is expensive, and often not necessary.  Having the persistence to look for used bargains, and having an eye for quality and a mechanic I trust, has been very helpful for my financial security.


-k
Paris - London - New York - Kim City
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Offline Omni

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Re: Debt Culture
« Reply #10 on: January 18, 2020, 01:27:47 pm »
Cool story, but is that the full story of you and debt?

No not quite.
 Way before the Vegas trip I decided I wanted to do some training and that was going to run me close to 10k. I went to the family, specifically my mother at that moment, and laid out the plan and wondered aloud if I might be able to get a family member to cosign a loan for me since I had zip for a credit rating at the time. A week or so later I was presented with a bank book with the money in the account and so I was able to carry on with my plan and pay the loan back without interest. God bless them. Different situation a number of years later on when I decided it was time to quit paying rent and buy a house. Of course I decided I wanted to buy a house in Victoria which was a pretty high cost housing area, even then, and the interest rates were a fair bit higher than they are now. Anyway I said a Hail Merry and signed the paperwork and was handed the keys. For a few years I ate a lot of beans, drove a few old beaters into the ground, and only occasionally sipped some of my home made wine. I did finally make it to the day the last payment was made and the deed was signed over to me. The lights remained on rather late that night, a little noisy with friends dancing in the living room, lots of snacks on the dining room table, (but no beans), and store bought booze. 
And further to this subject, I have always got a giggle out of Ted Turner's response to a question he was asked as to what he planned to do with his wealth. He replied " I plan to spend every nickel and the day I die I'm gonna write a bad check".
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Offline wilber

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Re: Debt Culture
« Reply #11 on: January 18, 2020, 02:45:12 pm »
Around thirty years ago someone said to me, success isn't having a million dollars, it's finding someone who will lend you a million dollars. More like ten million these days.
"Never trust a man without a single redeeming vice" WSC

Offline Queefer Sutherland

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Re: Debt Culture
« Reply #12 on: January 18, 2020, 07:14:26 pm »
Debt is for needed investments you can't afford, namely student loans and mortgages.  If your parents made decent money but didn't save for your post-secondary they're morons.  They had 18 years of compound interest in a tax-free RESP to do it.

There's no reason for any other debt besides emergencies or if you're a single parent because your spouse died or something.  If you're a single parent because you got knocked up out of wedlock i have no sympathy.

Bought my car used outright upfront.  Buy a car just off a 3-year lease, it may still have that new car smell and has lost the worst of it's depreciation value.  Pro tip:  Don't pay monthly car insurance bills.  Ask to pay for your car insurance outright for the whole year at the beginning of the year because when you pay monthly they tack on interest to your monthly bill.

I use credit cards to get the cash back points at the end of the year, and to defer paying for things for a month and a half until the payment is due so i can keep the money in my account to earn interest.  I keep most of my money in an online bank that has an interest rate over 2% and lets me pay bills out of it:  https://www.highinterestsavings.ca/chart/
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Offline Squidward von Squidderson

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Re: Debt Culture
« Reply #13 on: January 19, 2020, 01:08:02 pm »
  If you're a single parent because you got knocked up out of wedlock i have no sympathy.

Thanks for the sexist claptrap.


Quote
Bought my car used outright upfront.  Buy a car just off a 3-year lease, it may still have that new car smell and has lost the worst of it's depreciation value.  Pro tip:  Don't pay monthly car insurance bills.  Ask to pay for your car insurance outright for the whole year at the beginning of the year because when you pay monthly they tack on interest to your monthly bill.

Why would I pay outright for my car when I got 0% over 5 years?

Offline Queefer Sutherland

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Re: Debt Culture
« Reply #14 on: January 19, 2020, 03:05:13 pm »
Thanks for the sexist claptrap.

So now truth is sexist?  You going to cry?
"Nipples is one of the great minds of our time!" - Bubbermiley