Is debt worth it if I get a good deal?

There are many smart people in the world who argue back and forth about good debt vs. bad debt.  That conversation is for another post, but in this blog, I’m going to focus on the question about going into debt for something you can’t afford, but can get a great deal on.  Is it worth the debt if you get a great deal?

First of all, we have to acknowledge that in America, we struggle with debt, regardless of the conversation of “good” vs. “bad”.  Debt has crippled our country as well as our households.  Around 80% of Americans have some type of debt, and the average debt balance is around $38,000 (not including mortgages).  As a whole, we are nearing $15 Trillion in household debt!  Whatever you think about “good” debt or “bad” debt is irrelevant.  The statistics are real and financially, most people just aren’t winning with money.  

We live in the most marketed-to culture in the history of the world and it’s only getting worse.  We are exposed to so many ads per day, it’s a bit frightening.  Most Americans see/hear anywhere between 4,000-10,000 ads per day!  This does many things to our psyche but most of all, it causes us to want things we don’t really NEED, and if we don’t have the money, we go into debt to get it.

Money is so easily available to borrow so debt has become just a natural way of life, but I must tell you that consumer debt is a financial cancer to our households.  It eats away at our financial health so fast, by the time we realize what has happened, we have already signed away thousands of dollars in interest payments and are stuck with these payments month after month for years if not decades of our lives.  Debt will keep us broke if we aren’t intentional about getting rid of and staying away from it.

But back to our original question…Is debt worth it if I get a good deal?

Like anything, you must make your own decisions, but let me tell you a story about me and what I’ve learned.  I love a good deal.  I am a sucker for buying the larger item because it’s cheaper in bulk.  I love those big box stores (you know the ones I’m talking about).  The problem is I end up spending a lot of money because I buy so much.  If I’m not careful, I will buy something just because it’s a “good deal” and not because I need the item.  I went on vacation to a resort and went to the presentation where they want you to buy into their vacation ownership (timeshare).  It was a wonderful resort and we had a lovely vacation.  When they presented the package to us, it seemed like such a great deal.  It was quite expensive and I didn’t have the cash available at the time, but was so tempted to sign up just because it was a “great deal”.  I couldn’t believe how strong that urge was at the time.  I’m a math person and a financial coach for crying out loud!  I know better than to sign up for debt at 14.99% interest on a vacation ownership, but the “deal” looked so good that I actually considered it.  Fortunately, because I pre-made a commitment to not go back into debt when I got out several years ago, I didn’t sign up for it and now I look back with amazement at how close I was to taking 2 steps backward and going into debt again!  That is just one example of how tempting a “good deal” can be and luring us into a decade of paying interest on something we don’t really need.  

I understand how people get suckered into monthly payments for all sorts of things. We all have the same temptations.  A lot of these things we sign up for are important to our lives and some are actual “needs”, but we need to have a proper perspective on debt if we are going to succeed financially.  We have to learn to hate debt, like we hate cancer.  Cancer kills our bodies.  It destroys lives and we all know someone who has died from it.  If we look closely enough, debt and financial distress affects just as many (if not more) people in our lives.  It could even be you.  We need to understand how debt works and how it keeps us from building wealth and succeeding in our financial lives.  If you study wealthy people, you’ll find that the number one way to become wealthy is to get rid of and avoid consumer debt.  If you struggle with debt and want to turn your finances around and start winning, stop paying interest to the banks and keep more of your money for you and your family to enjoy.  Make that commitment to change.  If you want the results that wealthy people get, you have to do the things they do.  Live on a budget, be generous, save, invest regularly, avoid debt, and be intentional with your finances. 

You may be thinking..."it's too late for me.  I'm already neck deep in debt.  What do I do now?" Are you plagued by these thoughts?  Is debt keeping you from reaching your financial goals?  Do you want to break free and start winning with money?  I can help you make a plan to eliminate your debt completely, then start saving and investing for your future.  Your bright and successful future!  Let's delete debt forever and start living our Ideal Lives!