Most Common Misconceptions People Have Regarding Debt


Debt is such an ugly word, but people don’t seem to realize that often enough. Who wants to pay people every single month for things? I don’t; I hate owing money to companies and finding it necessary to give them so much of the money we work so hard earning. It’s not fun, and we don’t appreciate it. My husband and I work hard, and we play harder. We love nice things, but we also know the value of them. Five years ago, my husband bought himself a sports car – all cash. He saved for it, and he bought himself a small, cherry red convertible with two seats. It’s immaculate (except the window in the top – the back – is detaching from the top and he had to have a company order a new top for him that will hopefully be here in the next few weeks); and he owes nothing on it.

Someone recently asked us why we haven’t picked up a new car for him yet. His is not practical. We have four kids, after all. Well, I have a big SUV, so why do we need two of them? We know his car is not practical, and that is what we love about it. It is our date night car – and it’s the fun car. There is nothing I love more than getting behind the wheel of his car and shifting gears driving down the road with the top down and the music up entirely too loud.

Of course, the people who asked us why we aren’t looking to buy him a new car now that his is five years old weren’t satisfied with our, “Why? We have no payment on it,” answer. “But you can afford it,” they said. Yes, we can afford it. However, that doesn’t mean we have to buy a new car for him or that we want to spend money on something just because we can afford it. Besides, his job is about to change to a full-time remote position so he will be home with us 24/7 working in about a month. He will barely even need a vehicle at that point – so why would we spend money on one just because we ‘can’?

Debt is an ugly word, and it’s ugly because people choose not to see it for what it is. That conversation sparked a thought in me that made me want to write about it and share with the general public what that mindset means for those and their personal debt.

Not realizing everything you owe is debt

When friends tell us that they have no debt because they don’t use credit cards, I’m amazed they don’t think that they have debt. They have house payments. They have car payments. They have payment son their boats and other recreational vehicles. They have payments for a half dozen things, and that is debt. The problem is that many people don’t realize that anything other than credit card payments is also debt, and that can lead to a dangerous mindset.

Not realizing credit cards are not emergency funds

How many times do readers write to me and tell me that I should advise my other readers to simply pay off a credit card or apply for one and make that their emergency fund? I cannot even tell you; and I ignore every single one. Your credit card might be for emergencies such as forgetting your debit card at home or not being able to find an ATM near where you are making a purchase – or when you lose a card on vacation. It’s not, however, for your car repairs and your emergencies. You need an actual cash fund for those things, and people seem to forget that this is actually just reality.

Not living within your means

Debt happens when you don’t live within your means, but I will never understand people who buy things that they cannot afford. Listen, I get that you might need a car payment or a mortgage. Those are things I get. But I cannot figure out why someone would want to spend hundreds or even thousands of additional dollars every single month on other things. Why finance your furniture? If you cannot walk into a furniture store and pay cash for a new living room set, you are living above your means. If you cannot walk into any location and pay cash for the fun things you have, you cannot afford them. It’s a much better mindset to know this and then use your time to save up and pay cash for things you really want. Why pay for things for years and years when we all know you’re never going to use those thing for years? Really, you’re going to finance a couch for years but we both know you’re going to get rid of it before you pay it off. I just don’t get it.

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