Debt Phobia And How To Deal With It

debt fobia

I was once asked if I minded debt. I suppose nobody who has read any of my frugality writings will be surprised by my answer, but yes. I do mind having debt. I mind it to the point that the idea of taking out a loan on a house scares me to death.

While I want a house, and while I know that there are few options besides taking out a loan, the idea of owing anybody that much money freaks me out. The only type of loans I use is unsecured payday loans without credit check. If you take them from trustworthy direct lender, there is literally no risk involved.

I can attribute this phobia to my parents. They drilled it into me that DEBT IS BAD. I now know that they were referring to consumer debt, like credit cards and the like, when they drilled me on this, but at the time they did not really specify. The debt was bad, and my parents lived (and live) a debt-free life.

On my dad’s salary as a military officer and my mother’s occasional part-time work, they paid off their 30-year mortgage in 12 years, they have never taken out a car loan, they don’t have credit card debt, and they paid for our educations without taking out a loan.

Like them, my husband and I are doing everything we possibly can to stay out of debt and pay down the debt we do have very quickly. Logically, we know that there is good debt and bad debt.

The student loans my husband took are going to be paid back in a reasonable amount of time, and he will earn far more than he ever took out. He is in a decently paid field, and now, on his salary alone, we have paid down about a third of it in five months. Not bad. Neither my husband nor I have ever carried credit card debt. Ever. Both my husband and I are still driving the cars we bought in cash in high school. So far *knock wood* they’re holding up, and if something did happen to one of them, I think we could buy a reasonably-priced used car in cash.

However, if we want a house, we’re going to have to do into (nonschool) debt sometime. And I know that a mortgage is “good debt” and we’ll get tax breaks and blah blah blah, but it still scares me! I worry that we will buy a house, and everything in it will break, and we’ll blow through our savings, and then we’ll start depending on credit cards, and the next thing I know we will have all the consumer debt that we so carefully avoided, and will be stuck in it because we have to pay the mortgage, and there’s hardly any money left over for the credit cards. Despite the fact I am credit card debt-free, I can see how people get stuck in it.

I don’t think it’s the specific debt of a mortgage that I fear. I think it’s the snowball effect; the what-ifs that may or may not happen. And I can snowball no matter what situation I am in- renting, owning a home, living in a box. I also think I need to become more comfortable with “good debt.” It seems a lot of people don’t count good debt with debt. I do, but maybe I need to relax a little. Perhaps it’s not a debt I fear, but lack of security.

Incidentally, though I wish my mom and dad would have clarified earlier about ‘good’ debt and ‘bad’ debt, I am eternally grateful for the financial lessons that they taught me. Not only for what they said, but for how they showed me that debt-free living was possible, and for showing me the sacrifices they made that made this possible.