Money Magazine wrote an article called America’s Debt Crush here, with 9 couples and their problems with debt and what they are doing to get out.
I can definitely relate to the first couple Brittany Bellessa! It’s wondering if we made a mistake in buying a home and wondering if we shouldn’t have rented instead? The debt from student loans might not have been accumulated otherwise, definitely not for us. We would have used our home equity to pay for it. However, I wonder if we both feel this way because of the slumping housing market, which if it were booming we would be singing a different tune?
The second couple had a saver marrying a spender. They had to live well below their means to pay off the debt accumulated by the spender. While the third couple struggles daily with making ends meet. They are trying to sell their home so they are able to have more breathing room. The fourth couple lives paycheck to paycheck. And when something breaks they take out a loan.
The fifth couple lost their federal job and were unemployed for 6 months. During that time their credit cards ballooned from not having sufficient savings and now that they are employed again it’s a $20k lower salary. The sixth couple just made horrible decisions. They bought a house, then got a car loan, then went from a salary job to commissions. This has caused a monthly deficit of $600/month.
The single mom has no money. She can’t pay her CC minimums, is in danger of not paying her mortgage, and has no idea whether she should just file BK? The final couple walked out of college with $50k in debt mostly student loans and are accumulating more for graduate school in hopes of getting a better paying job.
It appears that we have a love affair with debt. When we’re in trouble Americans just turn to more debt as the answer. I wonder if this period of harder times with rapidly rising prices might not force us to face our problems? To really move back towards living below our means and saving money?
Do you think that America’s Love Affair with debt can ever end?
3 responses so far ↓
1 devil // Jul 23, 2008 at 7:37 pm
In Bellessa’s case, unless she makes at least twice what her husband does, buying the condo was definitely a mistake. Come on…a $319,000 mortgage and he only makes $42,000 a year? What were they thinking?
I had to stop reading because it appeared that the stories were just going to get worse from there.
2 Livingalmostlarge // Jul 23, 2008 at 7:53 pm
I think he makes $42k and she works too and I am guessing at least what he makes if not more. So they were in a reasonable ballpark of 2.5-3x their income for a house.
It’s that they are taking out loans equivalent to his salary.
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