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.

credit cards are my BFF

I don't know why everyone is always giving credit cards a bad rep these day.  Credit cards a great.  In fact I charge everything I can on a credit card.  I even wish I can pay my mortgage or car payment on it.  Why because I can get cash back.  In fact, I love credit cards so much, I don't even care what the rates they are charging. 

"That's INSANE!!" you say, "What about the interest?"

Well,  I don't worry about the interest.  I never even look at what they are charging for their rate.  Why?  I pay my credit card in full every month.  I never pay any interest on my CC bill.  EVER.

Credit cards did not doom America to have bad finances.  America doomed America to have bad finances.  Most people tend have the thinking of buy it now, pay for it later.  OK LATER is fine, but how much and when? The practice of not thinking about how much you can afford at-the-moment leads to thinking you can afford it in the long term.  If you can't buy it now with cash, why would you buy it at all?  Credit cards get a bad rep because most people do not consider paying for it later in installments means paying more, even if you got it on sale.

I hear people say they have high credit card debt for years.  Why years?  I understand that if you had some really bad situation and had to rack up a lot of debt.  When you can rebuild, pay that debt off should be a priority.  If you think of it as a utility bill, it works the same way.  You make sure that you don't own the utility company money because they will cut off your utilities, so you make sure they get paid.  Put the same reasoning in CC bills and you are sure to not rack up debt waist deep.

In college, I did something stupid.  No, not rack up CC debt.  In fact, it was the opposite.  I called the CC company to lower my limit to the bottom ($200) every time they raised it.  This is to ensured my spending didn't go that high, although it was probably not good for my credit score at the time.  However, over the next 2 years, I have learned to think about what I spend my money on.  Since I didn't like to pay for over charge fees, I was careful about I was buying.  If I didn't have the cash for it, I didn't buy it. 

Now it's the same.  If I can't pay for it, I don't buy it.  I don't charge it.  If I do buy, I better be damn well willing to write that check and pay for it in full when the CC bill came.