what is debt exactly?
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| Tue, 01-18-2005 - 8:38pm |
i just wonder...
when you hear people on TV, or ever us here on the boards say they are $50,000.00 in debt what are they condisering debt?
do you count what you have to pay off on your house? or your cars? i know that tuition can be debt- but that puts you towards a good goal of improving your value in the market... so isn't a mortgage good too? and i know that credit cards are obviously debt... but what about money borrowed from a retirement fund?
i just wondered what is considered "debt" and if everyone is using the same terms...
(just FYI, if you don't count cars DH and i only have $900.00 of credit card debt. we rent, have no school debt (anymore) and have minimun other random outstanding bills (-$20 for a doctors appt, $17 for a scrapbook bill, etc...) i think that is exceptionaly good. but then our cars put us up over $25k, and we borrowed from his plan once for $3,000.... so then we'd be closer to $30k in debt... but that just seems wrong when we only have two credit cards and pay over the minimun on EVERYTHING to pay it all off.... $900 vs $30,000.00 -see my confusion?)

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I can see how you would be confused, lol.
I count it all-if I owe it, it's debt. Even if it's to the retirement plan, because it has to be paid back.
Sometimes that's a very scary number to face.
Personally, I don't think there is 'good debt'. Yes, our school loans are helping us to get an education to better our work lives, but perhaps we could have come up with a better way to pay for it all.
I'd say it all comes down to your own definition of debt-I know that's not very helpful, sorry!
Lisa
We include everything. For us, this is - credit cards, student loan, a loan from my sister, and a car loan. I imagine it would be different if we had a mortgage, I might not count that.
But I think each person has their own definition. I don't think it really matters, so long as in the end, you know how much you owe.
All my best,
Danni
I think everyone counts everything different...but to me "If I *have* to pay it back - it's debt"...I borrowed money that I have to pay back.
Now, when I'm counting on paying off stuff, I don't really count the mortgage per se because well, that's a high number but I *would* count car payments because the cars depreciate and are worth less than what you paid for them usually the minute you drive them off the lot.
Becky
CL of 4th, 5th & 6th grade Scoliosis
If it helps, when I talk about "my" debt I'm including, Our MBNA loan, dh's school loan, and an amex and a discover card.
I am NOT including our mortgage (I do consider it debt, but since it's going to take me 30 yrs. to pay it off it's a whole 'nother category by itself for me, lol) and I do NOT include our cars, basically because they're leased and I see them more as a monthly expense/bill than a debt. (Hopefully next Apr. when my car lease is up dh and I will be leasing OR buying a car with a smaller payment, IF we buy - than I will consider it a "debt" and no longer a monthly bill). Hope that made SOME kind of sense. :)
I count it ALL as debt, but when I post about progress and talk about paying off debt before TTC, I mean what DH and I call the "non-house debt". For us, that is one car loan, one credit card, and two student loans.
I look at it this way- cars depreciate, just because you got an education doesn't necessarily mean you will make more money OR find a job in your field of study- it is money already spent and it may or may not help you in the long run. Vehicles ALWAYS depreciate and cannot be considered an investment. CCs, well, they aren't ever "good", even on a 0% APR. House debt is no-man's land for me- it is an investment (usually), but also your biggest monthly bill and debt (generally speaking), but I don't feel like it is a bad thing to have a mortgage. In fact, as long as one's mortgage is reasonable, a mortgage can be a very good thing to have.
That said, we have about $24k in non-house debt and 14.5 years left on our mortgage. We hope to get rid of the non-household debt in 18-24 months.
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