I had debt mostly from my twenties and a bit from my thirties, and I realised I carried a lot of shame about it. It was a combination of what, in particular, that period in my twenties represented, plus I’d internalised a lot of negative messaging about debt during childhood and grew up with a parent who was very intense and triggered about money, and there was also the very shaming personal financial narrative.
My husband and I had a convo about credit card debt about 8 years ago where we said we’d aim to be rid of it all in 5 years. I mostly forgot about it, and, yet, in 2021, two weeks before the 5 years, we paid it all off. Although my relationship with money has significantly evolved over the years, I notice where anxiety and shame about money show up.
Debt is a topic that’s used to judge the haves and the have nots. It is not a ‘bad’ thing to have debt, although it can, of course, become problematic at a certain level. What we’re often unaware of when we make judgmental comments about debt is that we’re playing into unconscious (and sometimes conscious) stereotypes about who has debt, and then you’re getting into class, race, and so forth.
I was used to getting loans when in college for laptops, surviving the college years and holidays at the time and I seen no issue with it. When I was in the depth of chronic illness and not able to work, a loan from the local Credit Union was unbelievably helpful. When the bank wouldn't give me a loan due to the circumstances then, the Credit Union was a saving grace and loan repayments was manageable. This did make me look into my money situation a bit more as things slowly got better. Once that loan was cleared with the credit union I keep up with the direct debit set up to repay that loan and built up a savings buffer and rainy day fund. It makes me not want a loan that isn't manageable if not able to work due to circumstances. I know I will probably have to get one for a new to me car down the line but have been saving to be able to put some money towards it when it comes to that stage. It definitely changes and evolves depending on circumstances.
I'm okay with debt these days as long as I'm actively chipping away at it. I really took advantage of the student loans payment pause in the U.S. during Covid and then I kept waiting for Biden to forgive the $8,000 I had left. At this point its been 10 years since I graduated college and if I'd just kept up the payments the past 4 years I'd be done lol Now I have a little thermometer printed off and I'm paying $400 a month. It feels really cool to be taking control and seeing that thermometer get redder. And when I'm zeroed out that $400 will go towards a monthly car payment on a used car.
I can truthfully say that I and my wife are totally debt free. I can also truthfully say that we always have debt but debt that we can fully manage and promptly pay off on time. The amount of debt that we have is not an issue so long as it can be properly managed - both in my name as well as in my wife's name. The goal that we always strive for is to have a high and good CREDIT RATING.
You can accomplish so much more when you show that you have a high credit rating, such as when applying for a loan or a mortgage for example.
So when I say that I'm "debt free" I mean that I'm free to totally control and use debt as a tool and not let debt control me. See the difference? Save and invest wisely. Budget wisely. Spend wisely. So if you look around you'll see that billionaires all have debt but know how to manage it and that's how they become billionaires, not that I'll ever become one of those any time soon ! 😉
Use debt! I see debt as a resource to expand my options, not a sin to avoid. I don’t think the problems we have with debt are due to how much we use; I think they’re due to the fact that financial products are intentionally complex and difficult to navigate. My stance is: Use any and as much debt as you want; just learn how the products work so you know how to manage the consequences in your life and finances. No obligation to pay it off.
I’ve written about my own debt a lot, and I’d love to see personal finance writers more willing to open up about their debt even when they’re not actively eliminating it.
Hello. I’ve followed your work for years and this really connected me. I acquired a similar amount of consumer debt to yours on a line of credit between 2013-2017 as a combination of a period of insecure employment and poor impulse control related to CPTSD. I’ve carried a lot of shame because of pressure from my mother about money. Growing up, the only financial advice I was given was save all your money and spend as little as possible because my mom had trauma from poverty. This did not equip me for success. I was regularly grilled about my finances into my 30s and screamed at (literally) if I revealed I had any debt, despite now having a high income household with my partner and always having excellent credit. This honestly paralyzed me from developing better habits of knowing anything meaningful about savings or investments and caused me to really internalize a scarcity mindset that didn’t drive me to save, but to spend to accumulate “resources”. Recently, I mentally divided my debt in half and made a plan to pay off half in five years. I figured a small amount regularly each month was better than what I was doing before, which was trying to pay it in larger chunks tan dipping back in when I fell short and ultimately getting no where. The reality is we have completely different resources available to us than our parents’ generation. What worked for them will not work for us in the current system. If they don’t understand that, we have to accept it and go on our own path anyway. This is the world they created for us yet they fail to see it.
I consider myself to be debt free. I put all my purchases on a credit card, but depending on the size of purchase/ how much shopping I’ve done it gets paid same day or at least once a week. I get cash back so I feel this makes sense for me.
My biggest form of debt was my student loans. When I was receiving them (incurring debt) it felt good because I had money to enjoy my university experience. But when I finished school the loans (debt) were really restrictive. I had no savings and a negative net worth. It really limited my opportunities. I didn’t live close to the best places to be for my industry (at home with parents), had no money for a car or rental deposit.
My loans are all paid off and I own my car outright. I definitely want to reduce the need for debt in future though expect to need it if I ever decide to purchase property and when the time comes to replace my car. There is some fear related to debt. I don’t want to be stuck in a situation again where I have to give up opportunities because I don’t have the funds. I know I wouldn’t be comfortable opening those doors of opportunity by incurring debt.
I am definitely on a journey not so much to be okay with my debt, but to protect myself from the societal shame in having debt. This is why I avoid almost all personal finance writing now ~ it's such a shaming space and I won't make space for that any more. In order to chip away at my society-induced shame, I need to step away from most of the media on this topic, the same as how I have to stay away from diet and fitness culture media in order to heal myself when it comes to food and body composition. Thanks for being you, Cait!
It's interesting because I don't think I've thought of debt as good vs bad, more as stressful vs not stressful. So stressful debt being anything with a high interest rate, particularly if used to buy things I don't 'need' (e.g., I nicer sofa if I already had somewhere to sit). Not stressful being my personal student loan debt which as a UK person who went to uni a while ago, has low interest (tracking base rate) and doesn't have to be paid back unless I earn a certain amount. I've had that in a savings account earning more interest than I pay on it. I am thinking of paying it off however, and otherwise have no debt at all. Unless you count credit cards I pay off in full each month to earn cashback, which I don't as I don't spend more than I have to pay back.
I guess I immediately start thinking politically, which is to say that rather than necessarily blaming the individual (although of course we each have agency over our choices) we need to look at whether people are crippling their future selves due to the whims of late stage capitalism. Either because they're needing expensive debt to survive, or they're buying things that we're marketed - almost like gambling addiction, I don't think the human brain was designed for the conditions we're currently in!
Shame about debt needs to be put away. Borrowing and savings shouldn't be at the front end of personal finance or financial planning. The objective of personal finance decisions starts with living standard as an objective. The best, sustainable living standard may or may not involve debt. The challenge is that CFPs and personal finance writers who cite them, perpetuate the preferences of financial institutions that have always advocated placing money in their products. Fortunately, movement is afoot to recognize that Nobel laureates spoke to consumption and savings a long time ago, and economics-based decision-making is becoming the future. I teach these principles to my undergraduates, and we have some financial planning firms in the U.S. that have moved in this direction. One of the reasons I started Personal Finance Economics was to get these ideas in front of a wide swath of households, regardless of income or wealth. Cait, you are on to something I write elegantly about it.
My relationship with debt today is ...precise! I wish I had been precise previously but all I can do is meet myself where I am now and give myself grace. Since the pandemic we have struggled as a family unit to recover and recoup. Something we never thought would happen. So being able to be consistent in where our money is needed is really just for survival. I would love to feel free around money again but am not sure that is possible or even responsible.
I don't have any debt now and I like it, but I'm open to having a mortgage and maybe a line of credit or car loan, as long as they're reasonable and proportional to my means. I hope to never have credit card debt, but I do think credit cards are a useful tool and I did finance part of my education with student loans, which were very useful but I also chose to pay them off quickly. I think I have too much fear of interest when leverage could actually be a useful tool and increase my net worth if used responsibly.
Great post! I have a mortgage for my home but other than that, after I paid off my student loan long ago I found debt so stressful, so I never got loans, I didn’t even use a credit card! I see that it’s a great tool for most people but it just felt to me like such a mental burden. I know I’m unusual! When my daughters older I’ll teach her not to be afraid of it as it can make life much easier, but without racking up huge unaffordable debts of course! 🙏🏻✨
This is an interesting question. I'm from a long line of folks who are extraordinarily (cripplingly?) debt averse, and always had more time than money. Being thrifty / avoiding debt was absolutely a moral imperative.
My own debt was largely student loans, but even those felt suffocating - bigger payments than my rent. I tend to feel like my debts kept me looking backward, paying for my past self. I don't regret my education, but I don't think I realized exactly how that debt would lead to me deferring everything else I wanted in life.
I worked a series of low-paying but interesting jobs for the first decade of my career, but a couple years ago I made a conscious decision to hop jobs/careers to something with more cash flow, which has helped enormously in fast forwarding my goals (more income instead of just being thriftier with what little I had... something my ancestors may have never considered). I was able to pay off my student loans, I just bought a car with cash, and I'm now saving up for a huge chunk of a house downpayment - I'm not ready to buy yet, and I'd love to get my mortgage payments low enough to give me flexibility to drop back down to a lower paying job eventually, if that helps my overall quality of life.
I will say after so long of caring for my past self, it's been incredibly refreshing to look forward. I feel really grateful that I'm in the privileged position to be able to look forward now to my future self and lay groundwork to take care of her.
I want it gone. Mostly because it has been with us for so long. We having been paying off my husbands 250k worth of student debt since 2013. And we only have 30k to go and it still seems so far away.
That being said, we own a house and our AC/Furnace just went out so we took out A 0% loan for 12 months on 13k. And I felt so fortunate that we have such a good credit score we have access to easy loans with low interest rates
I see debt as a tool now more than I used to. And I really appreciate you reinforcing that debt doesn’t define a persons character. Because some days I think we are just not trying hard enough or “serious” enough to pay our debt off faster.
We are living our lives, and I’m proud with what we have done.
I had debt mostly from my twenties and a bit from my thirties, and I realised I carried a lot of shame about it. It was a combination of what, in particular, that period in my twenties represented, plus I’d internalised a lot of negative messaging about debt during childhood and grew up with a parent who was very intense and triggered about money, and there was also the very shaming personal financial narrative.
My husband and I had a convo about credit card debt about 8 years ago where we said we’d aim to be rid of it all in 5 years. I mostly forgot about it, and, yet, in 2021, two weeks before the 5 years, we paid it all off. Although my relationship with money has significantly evolved over the years, I notice where anxiety and shame about money show up.
Debt is a topic that’s used to judge the haves and the have nots. It is not a ‘bad’ thing to have debt, although it can, of course, become problematic at a certain level. What we’re often unaware of when we make judgmental comments about debt is that we’re playing into unconscious (and sometimes conscious) stereotypes about who has debt, and then you’re getting into class, race, and so forth.
I was used to getting loans when in college for laptops, surviving the college years and holidays at the time and I seen no issue with it. When I was in the depth of chronic illness and not able to work, a loan from the local Credit Union was unbelievably helpful. When the bank wouldn't give me a loan due to the circumstances then, the Credit Union was a saving grace and loan repayments was manageable. This did make me look into my money situation a bit more as things slowly got better. Once that loan was cleared with the credit union I keep up with the direct debit set up to repay that loan and built up a savings buffer and rainy day fund. It makes me not want a loan that isn't manageable if not able to work due to circumstances. I know I will probably have to get one for a new to me car down the line but have been saving to be able to put some money towards it when it comes to that stage. It definitely changes and evolves depending on circumstances.
I'm okay with debt these days as long as I'm actively chipping away at it. I really took advantage of the student loans payment pause in the U.S. during Covid and then I kept waiting for Biden to forgive the $8,000 I had left. At this point its been 10 years since I graduated college and if I'd just kept up the payments the past 4 years I'd be done lol Now I have a little thermometer printed off and I'm paying $400 a month. It feels really cool to be taking control and seeing that thermometer get redder. And when I'm zeroed out that $400 will go towards a monthly car payment on a used car.
Hi Cait,
Here are my thoughts and attitude about debt:
I can truthfully say that I and my wife are totally debt free. I can also truthfully say that we always have debt but debt that we can fully manage and promptly pay off on time. The amount of debt that we have is not an issue so long as it can be properly managed - both in my name as well as in my wife's name. The goal that we always strive for is to have a high and good CREDIT RATING.
You can accomplish so much more when you show that you have a high credit rating, such as when applying for a loan or a mortgage for example.
So when I say that I'm "debt free" I mean that I'm free to totally control and use debt as a tool and not let debt control me. See the difference? Save and invest wisely. Budget wisely. Spend wisely. So if you look around you'll see that billionaires all have debt but know how to manage it and that's how they become billionaires, not that I'll ever become one of those any time soon ! 😉
Use debt! I see debt as a resource to expand my options, not a sin to avoid. I don’t think the problems we have with debt are due to how much we use; I think they’re due to the fact that financial products are intentionally complex and difficult to navigate. My stance is: Use any and as much debt as you want; just learn how the products work so you know how to manage the consequences in your life and finances. No obligation to pay it off.
I’ve written about my own debt a lot, and I’d love to see personal finance writers more willing to open up about their debt even when they’re not actively eliminating it.
Some debt experiences:
https://www.healthyrich.co/p/debt-stories
https://www.businessinsider.com/personal-finance/never-refinancing-student-loan-debt-shamed-2023-1
Hello. I’ve followed your work for years and this really connected me. I acquired a similar amount of consumer debt to yours on a line of credit between 2013-2017 as a combination of a period of insecure employment and poor impulse control related to CPTSD. I’ve carried a lot of shame because of pressure from my mother about money. Growing up, the only financial advice I was given was save all your money and spend as little as possible because my mom had trauma from poverty. This did not equip me for success. I was regularly grilled about my finances into my 30s and screamed at (literally) if I revealed I had any debt, despite now having a high income household with my partner and always having excellent credit. This honestly paralyzed me from developing better habits of knowing anything meaningful about savings or investments and caused me to really internalize a scarcity mindset that didn’t drive me to save, but to spend to accumulate “resources”. Recently, I mentally divided my debt in half and made a plan to pay off half in five years. I figured a small amount regularly each month was better than what I was doing before, which was trying to pay it in larger chunks tan dipping back in when I fell short and ultimately getting no where. The reality is we have completely different resources available to us than our parents’ generation. What worked for them will not work for us in the current system. If they don’t understand that, we have to accept it and go on our own path anyway. This is the world they created for us yet they fail to see it.
I consider myself to be debt free. I put all my purchases on a credit card, but depending on the size of purchase/ how much shopping I’ve done it gets paid same day or at least once a week. I get cash back so I feel this makes sense for me.
My biggest form of debt was my student loans. When I was receiving them (incurring debt) it felt good because I had money to enjoy my university experience. But when I finished school the loans (debt) were really restrictive. I had no savings and a negative net worth. It really limited my opportunities. I didn’t live close to the best places to be for my industry (at home with parents), had no money for a car or rental deposit.
My loans are all paid off and I own my car outright. I definitely want to reduce the need for debt in future though expect to need it if I ever decide to purchase property and when the time comes to replace my car. There is some fear related to debt. I don’t want to be stuck in a situation again where I have to give up opportunities because I don’t have the funds. I know I wouldn’t be comfortable opening those doors of opportunity by incurring debt.
I am definitely on a journey not so much to be okay with my debt, but to protect myself from the societal shame in having debt. This is why I avoid almost all personal finance writing now ~ it's such a shaming space and I won't make space for that any more. In order to chip away at my society-induced shame, I need to step away from most of the media on this topic, the same as how I have to stay away from diet and fitness culture media in order to heal myself when it comes to food and body composition. Thanks for being you, Cait!
It's interesting because I don't think I've thought of debt as good vs bad, more as stressful vs not stressful. So stressful debt being anything with a high interest rate, particularly if used to buy things I don't 'need' (e.g., I nicer sofa if I already had somewhere to sit). Not stressful being my personal student loan debt which as a UK person who went to uni a while ago, has low interest (tracking base rate) and doesn't have to be paid back unless I earn a certain amount. I've had that in a savings account earning more interest than I pay on it. I am thinking of paying it off however, and otherwise have no debt at all. Unless you count credit cards I pay off in full each month to earn cashback, which I don't as I don't spend more than I have to pay back.
I guess I immediately start thinking politically, which is to say that rather than necessarily blaming the individual (although of course we each have agency over our choices) we need to look at whether people are crippling their future selves due to the whims of late stage capitalism. Either because they're needing expensive debt to survive, or they're buying things that we're marketed - almost like gambling addiction, I don't think the human brain was designed for the conditions we're currently in!
Shame about debt needs to be put away. Borrowing and savings shouldn't be at the front end of personal finance or financial planning. The objective of personal finance decisions starts with living standard as an objective. The best, sustainable living standard may or may not involve debt. The challenge is that CFPs and personal finance writers who cite them, perpetuate the preferences of financial institutions that have always advocated placing money in their products. Fortunately, movement is afoot to recognize that Nobel laureates spoke to consumption and savings a long time ago, and economics-based decision-making is becoming the future. I teach these principles to my undergraduates, and we have some financial planning firms in the U.S. that have moved in this direction. One of the reasons I started Personal Finance Economics was to get these ideas in front of a wide swath of households, regardless of income or wealth. Cait, you are on to something I write elegantly about it.
My relationship with debt today is ...precise! I wish I had been precise previously but all I can do is meet myself where I am now and give myself grace. Since the pandemic we have struggled as a family unit to recover and recoup. Something we never thought would happen. So being able to be consistent in where our money is needed is really just for survival. I would love to feel free around money again but am not sure that is possible or even responsible.
I find debt useful. It helps me to defer the cost of big ticket items. It gives me an installment plan for the things I want.
I’m currently paying off my credit card debt so that I can have that money for investments.
I’ll keep my car and school loans (for now).
I don't have any debt now and I like it, but I'm open to having a mortgage and maybe a line of credit or car loan, as long as they're reasonable and proportional to my means. I hope to never have credit card debt, but I do think credit cards are a useful tool and I did finance part of my education with student loans, which were very useful but I also chose to pay them off quickly. I think I have too much fear of interest when leverage could actually be a useful tool and increase my net worth if used responsibly.
Great post! I have a mortgage for my home but other than that, after I paid off my student loan long ago I found debt so stressful, so I never got loans, I didn’t even use a credit card! I see that it’s a great tool for most people but it just felt to me like such a mental burden. I know I’m unusual! When my daughters older I’ll teach her not to be afraid of it as it can make life much easier, but without racking up huge unaffordable debts of course! 🙏🏻✨
This is an interesting question. I'm from a long line of folks who are extraordinarily (cripplingly?) debt averse, and always had more time than money. Being thrifty / avoiding debt was absolutely a moral imperative.
My own debt was largely student loans, but even those felt suffocating - bigger payments than my rent. I tend to feel like my debts kept me looking backward, paying for my past self. I don't regret my education, but I don't think I realized exactly how that debt would lead to me deferring everything else I wanted in life.
I worked a series of low-paying but interesting jobs for the first decade of my career, but a couple years ago I made a conscious decision to hop jobs/careers to something with more cash flow, which has helped enormously in fast forwarding my goals (more income instead of just being thriftier with what little I had... something my ancestors may have never considered). I was able to pay off my student loans, I just bought a car with cash, and I'm now saving up for a huge chunk of a house downpayment - I'm not ready to buy yet, and I'd love to get my mortgage payments low enough to give me flexibility to drop back down to a lower paying job eventually, if that helps my overall quality of life.
I will say after so long of caring for my past self, it's been incredibly refreshing to look forward. I feel really grateful that I'm in the privileged position to be able to look forward now to my future self and lay groundwork to take care of her.
I want it gone. Mostly because it has been with us for so long. We having been paying off my husbands 250k worth of student debt since 2013. And we only have 30k to go and it still seems so far away.
That being said, we own a house and our AC/Furnace just went out so we took out A 0% loan for 12 months on 13k. And I felt so fortunate that we have such a good credit score we have access to easy loans with low interest rates
I see debt as a tool now more than I used to. And I really appreciate you reinforcing that debt doesn’t define a persons character. Because some days I think we are just not trying hard enough or “serious” enough to pay our debt off faster.
We are living our lives, and I’m proud with what we have done.