Hear about how much debt everyone in the US has all the time, curious about some of your stories!
My bad debt is 10k left on a school loan from a for profit school that is now out of business.
Only other debt is house.
So how are you all doing with debt management?
A car loan for a completely unnecessary car.
Can we afford it? Yes, with reasonable budgeting, no sacrifices needed.
Will the car appreciate? Undeniably.
Do we need a toy like this? Fuck no.
Did it anyway. I’ve been poor for such a long time it’s really hard to justify any frivolous purchase at all, but we have good jobs now. I waffle between “This is stupid” and “I’ll never get to do this again, so why not now?” Literally YOLO.
The rest of debt is “good”, like the mortgage building equity, a CC to keep credit rating good (paid off monthly).
You can’t leave a comment like that and not tell the car bois what you got.
You bought a literal racecar? Hell yeah dude. Live your best life.
Hah, too old for that risky stuff. Hitting a wall at a buck twenty doesn’t sound like fun. Yeah, they absolutely are race cars, but they are built to be street legal as well. That’s the direction I’m in.
That’s awesome man. Hope it brings smiles for a long time.
Thanks!
But cars don’t appreciate in value…
Good on you with everything else and I’m with you 100%, but as soon as you drove that car off the lot it’s been deprecating in value.
I have a 1964 Lincoln Continental convertible. Cars can appreciate, I assure you.
Historically speaking they don’t. I understand there are outliers for sure.
Yes they do.
You just have to pick the right car, and it’s not gonna be an off-the-shelf regular car.
If you look at all the cars that have ever existed 99/100 times that car is deprecating.
Yes, OP may have bought a classic car or something with high resale value. I was simply speaking in generalizations. The vast majority of cars depreciate in value once you drive them off the lot.
TBF you made generalizations that a) they don’t appreciate, and b) my car’s value depreciated off the lot directly to the initial statement I made that the car I purchased would appreciate.
I can assure you that these statements are incorrect in regards to my purchase. If you want to walk back your statements to not be in reference to my initial position, who were you talking to then?
I mean if it can be paid off with fun money and doesn’t ruin retirement plans, not the end of the world if the interest rate was good!
Got a ~3% rate a couple years ago, so not bad.
I had pretty substantial CC debt about a year ago. Nearing $14k. After health issues, having to move, replace many belongings, car repairs, etc. Used a 401k loan to pay off 10k of it, and since that loan was paid off (it was over $800 a month) I’ve paid the rest down under $3k, and should hopefully have it paid off by either year end or spring at the latest. Currently it’s sitting in 0% APR though, so it’s at least not eating away with interest.
Smooth moves!
Super good job on getting that under control.
Art school degree was 80k. It’s down to 40k now, still feels impossible.
I guess my mortgage could be considered bad debt on account of being adjustable interest rate - this is however the most common type of mortgage arrangement in Sweden where I live. This has led to my interest rate costs going up an eye watering 400% in about a year.
I’ve got ~130k in loans on it. I’m in the privileged position of being able to pay it off fully if the interest rate costs start exceeding the expected returns from the stock market, though, so feel no need to shed even a single tear for me.
The Swedish housing market is a classic zero interest trap story - low interest rates combined with tax incentives and housing availability rates leading to ownership being significantly more lucrative - has led to prices skyrocketing and debt to income ratios spiraling out of control. With adjustable rates being the most common arrangement - again, due to some truly psychotic public policy - now the population that lent money to buy homes are stuck with sickening monthly payments and no way to get out of the debt, since the prices have dropped below purchase price. Not too much though, because of how crazy scarce the housing is.
Everyone loses but the banks.
I guess my mortgage could be considered bad debt on account of being adjustable interest rate - this is however the most common type of mortgage arrangement in Sweden where I live. This has led to my interest rate costs going up an eye watering 400% in about a year.
As a Dane am I envious of some of your systems like investeringssparkonto, but we have the better mortgage system. My home loan is locked in at 1% for 30 years.
You guys have had ENORMOUS immigration over the last eight years without building homes at commensurate rates. No wonder it placed pressure on housing. I don’t think your government had a realistic housing and immigration plan. I guess that’s why they were voted out. I hope things improve.
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I have $150k in mortgage debt on a house worth about twice that. Plus a couple more years car debt.
What really gets me is my health insurer severed relations with the county in May and I got hospitalized two weeks ago. So now I will owe the $8,000 out of network deductible. That pisses me off.
Small promotion for !personalfinance@lemmy.ml, the community is usually quite helpful
About £30k on a mortgage. I’m 49 and bought a house with my wife in 2009 for £105k, sold that for £150k. Bought another one in 2019 for £220k.
Apart from that, never really in debt. Owing money bothers me, apart from fines but I don’t consider them as debt.
This is essentially the same as me. I owe around £40k on a mortgage and my wife has student debt that she’ll never have to repay. Other than that zero debt. I don’t do debt and I like that I’m, more or less, debt free (mortgage doesn’t really count imho.)
I live in the Midwest region of the United States.
$55k in student loan debt, down from $100k eight years ago. $10k auto loan. $210k on the mortgage, which I honestly can’t believe I was ever approved for. No credit card debt.
There have been some very scary moments, but I’ve somehow managed to keep my head more-or-less above water so far.
What’s “bad” debt? What’s “good” debt?
TLDR: Low interest debt that provides long term financial gain is good. Mortgage for primary residence is almost always considered good. Loans to invest into your home that increase its value and make it more reliable/long standing is good. Low interest debt to buy assets for your business is good. Reasonable loans for college is considered good.
Car loans are a bit harder because they lose value as time goes on. But a small loan with good interest is usually considered fine for a car. Buying a brand new car with a loan will almost always be bad, since you’re paying interest to use a depreciating asset. But basically a car loan is always bad if it ever goes upside down, meaning you owe more on the loan than the car is worth. New cars that happens almost instantly.
Basically all other debt is bad.
Ok!
Not in US. Have about 80k€ mortgage debt at very low interest, for renting. Totally covers my monthly payments
Oh that’s great! Sounds like you’re rocking.
Don’t know where you live but in the US any home near a city is like 400k, so having a mortgage at low interest at 80 sounds great.
No debt is good, but a mortgage is at least not bad if it’s affordable.
Debt you’ve used to make profitable investments
200k student loans, 110federal, 90k private
80k€ for the house but other than that debt free and plenty of savings/investments
A bank overdraft I use to restrain my consumerism.
$628.94 on my credit card.
None. Just my house.
I have a credit card bill but it gets paid off regularly.
