Thursday, June 30, 2011

is debt normal?

The other day, I was having dinner with a close friend.  We got on to talking about personal finance, and how we are doing. The friend's significant other's spending habits came up.  It turns out that the SO had quite a bit of debt before and my friend had helped him get debt free.  However, as soon as the SO's children from a previous marriage came around, the debt started piling up again. 

These grown children had no problem asking  demanding large sums of  money for things they could not afford.  What is worse is that the SO felt guilty for not being around to raise them and says "yes" without thinking about the ramification of his financial decision on the current relationship, and the fact that these children will come back again and again for more money.  So the friend said "that is so American", meaning that the SO and most of America live with the idea that debt is OK.  I would tend to disagree with the friend American comment - it's not only Americans that carry debt.  However, I do see the point about carry debt in America is seen as normal. 

Is it normal?  Should it be?  To some degree sure.  It makes owning things easier.  It sure as heck feeds the banking/mortgage industry billions of dollars.  But why do we need to own things?  Does it make things more stable to own things?  Let's take home ownership.  Is it really "safer"?  In the current economy, you can be put out of you house as easily as a rental place.  That's it's not really safer.  Is it for passing down to your children?  That seems to more of a pain to them when the inheritance tax and legal issues come up.  So why do we rack up debt to own things?  Not that I don't advocate it, just wondering what drives us to do so.

No comments:

Post a Comment

Follow by Email