Fear Of Life

[Moxie]

This is still what I grapple with after leaving Christianity. I was told to fear so much: god, non-christians, satan, demons, etc. I realise now that I've subconsciously let some other fears control my life. Right now I'm dealing with the fear of debt. I was told as a child that debt is deadly. I've never been in debt. Ever. But at the same time, I haven't gotten as far in life as I could be had I accrued some debt.

I'm thinking about going back to college for a second bachelor's degree. I earned the first degree without student loans, but now I have no choice except to accept loans. I'm also thinking about getting a real credit card (the one I have is a college credit card with a small limit).

But for some reason, I have this looming fear that if I get into debt, I'll physically die. I know that's crazy, but I can't get it out of my head. I associate debt with literal death because it takes money to get the basic necessities of life, and if you're in debt, well, yeah.

I really feel like I'm missing out on life because I've never borrowed money to explore life. I haven't really explored life.

 

Thoughts?

[Vixentrox]

There is nothing wrong with paying for things up front. Actually it is pretty admirable. Of course, could be difficult to buy a house, car, land or open a business without going in debt. The biggest thing is to keep it manageable. As long one stays responsible with credit it isn't a big deal. Start out small. Get a real credit card and start using it to pay for bills that you normally write a check or use cash for. Pay off your balance every month. Maybe take out a small personal loan...like $1000 and pay it off in a couple months, just to get used to the idea.

[Moxie]

I just applied for a real credit card. I don't make very much money right now, but I'm hoping I'm approved. I once tried to apply for a loan, and was told I needed a co-signer. There is no one available to co-sign. My parents are both mentally and physically challenged.

I still have this fear that without any money/credit I'll end up dead in some alley or something.

Yet many people are deep in debt and they are still alive, so, *shrug*

[luvless]

I agree with Vixentrox. You aren't missing out on much and in our home we try to pay everything up front. It is healthy to develop good credit though. My mother who does home loans told me having three credit lines availible (not maxed) is good, but anymore can look bad on your credit score. Just keep them open, pay them off every month early (never pay the minimum) and you will be fine. I never had credit cards until recently, so I will go buy a pair of shoes on one card and pay it off right away so my credit score is climbing.

[Moxie]

I don't make nearly enough money to even rent an apartment. I used to but I had to relocate for more opportunities. It sounds too easy. With my college credit card I always pay more than the minimum and very early. I still wonder where people just get money from, whether it's a paycheck or a credit card.

How can I deal with this fear of starving to death in some dark place?

[Vixentrox]

Umm...you do work...you get a paycheck. It's no big mystery.

[Shyone]

I don't make nearly enough money to even rent an apartment. I used to but I had to relocate for more opportunities. It sounds too easy. With my college credit card I always pay more than the minimum and very early. I still wonder where people just get money from, whether it's a paycheck or a credit card.

How can I deal with this fear of starving to death in some dark place?

First, you should recognize that your fears are irrational. People don't die in this country from starvation.

 

Second, have a plan. The plan should include a budget, and that budget should include savings - even if it is only a little. Then, when any uncertainty arises, you have that cushion.

 

Third, consider your resources - family, city, friends, line of credit (e.g. credit card unused balance), and "valuables." Your net worth is more than just what you own. It includes what you can borrow in a pinch.

 

Fourth, be consistent, do a good job, but always consider the possibility of the "worst case scenario." That way, even if you should lose your current job, you will know what to do.

 

Fifth, be very careful with credit. If you can't afford something in the first place, buying on credit is probably not the answer unless there are no other choices (e.g. a house or possibly a car). Buying groceries on credit is a killer even if you think you have it under control. By keeping your credit card balance low, you increase your available credit for emergencies.

 

Hope that helps.

[ShallowByThyGame]

don't think of it as debt, think of it as investing.

[Moxie]

Yes I work and get a paycheck, though sometimes I'm surprised that I've been hired at all. I'm especially surprised that I'm still alive. The fear is deep.

[buffettphan]

Like others said, use credit responsibly. Don't over-extend yourself.

 

One other thing to keep in mind though and maybe this will help with your fear about money issues (?). Remember that the churches preach that "debt is evil"* so they can get even more of THEIR mitts into YOUR wallet. Taking control of your own finances, without church influence, gives you power. You're not gonna die over a credit card bill or a student loan. But if everybody stopped paying the churches, they would die out eventually. Churches know how to keep their congregations under control -- physically, psychologically, intellectually, spiritually, emotionally, and financially.

 

*except if it's their own debt of course -- gotta build those bigger churches ya know!

[Shyone]

Yes I work and get a paycheck, though sometimes I'm surprised that I've been hired at all. I'm especially surprised that I'm still alive. The fear is deep.

You would probably like a book I heard about called "Bag Lady." A woman was fearful all her life of becoming a bag lady and impoverished. Then, of all things, she lost everything to Bernie Madoff - and her fears seemed to be coming through.

 

She is an artist, btw. There is a lot more to the story, but it all centers around her fear of not being able to support herself - or even survive.

 

Her fear ran deep.

 

But, she tells how to overcome that fear and survive even when the chips are down, and that's what makes the book worth reading.

[Moxie]

You would probably like a book I heard about called "Bag Lady." A woman was fearful all her life of becoming a bag lady and impoverished. Then, of all things, she lost everything to Bernie Madoff - and her fears seemed to be coming through.

 

She is an artist, btw. There is a lot more to the story, but it all centers around her fear of not being able to support herself - or even survive.

 

Her fear ran deep.

 

But, she tells how to overcome that fear and survive even when the chips are down, and that's what makes the book worth reading.

 

 

The actual title of the book is The Bag Lady Papers: The Priceless Experience of Losing It All. The lady doesn't really lose it all. She basically went from upper middle class to middle class. She still had access to her son's guest house, royalties from her previously published books, among other things. She was never destitute.

[Shyone]

You would probably like a book I heard about called "Bag Lady." A woman was fearful all her life of becoming a bag lady and impoverished. Then, of all things, she lost everything to Bernie Madoff - and her fears seemed to be coming through.

 

She is an artist, btw. There is a lot more to the story, but it all centers around her fear of not being able to support herself - or even survive.

 

Her fear ran deep.

 

But, she tells how to overcome that fear and survive even when the chips are down, and that's what makes the book worth reading.

 

 

The actual title of the book is The Bag Lady Papers: The Priceless Experience of Losing It All. The lady doesn't really lose it all. She basically went from upper middle class to middle class. She still had access to her son's guest house, royalties from her previously published books, among other things. She was never destitute.

That's right. What she lost was everything she put in Madoff's hands, but the fear of being a bag lady, while somewhat irrational, seemed to be imminent.

 

For someone with similar irrational fears of dying of starvation, a book like this might be inspirational.

 

Or not.

[Vixentrox]

Could join the military if you are that afraid of starving. They provide food & shelter for you.

[Moxie]

It's not the fear of starving so much as it is the fear of taking the first step into the world of debt. It feels like stepping off a cliff.

 

[Shyone]

It's not the fear of starving so much as it is the fear of taking the first step into the world of debt. It feels like stepping off a cliff.

 

Planning is the key.

 

Make a budget, then your debts will be nothing more than bills to pay provided you don't acquire more debt than your budget can handle.

[millie999]

This is still what I grapple with after leaving Christianity. I was told to fear so much: god, non-christians, satan, demons, etc. I realise now that I've subconsciously let some other fears control my life. Right now I'm dealing with the fear of debt. I was told as a child that debt is deadly. I've never been in debt. Ever. But at the same time, I haven't gotten as far in life as I could be had I accrued some debt.

I'm thinking about going back to college for a second bachelor's degree. I earned the first degree without student loans, but now I have no choice except to accept loans. I'm also thinking about getting a real credit card (the one I have is a college credit card with a small limit).

But for some reason, I have this looming fear that if I get into debt, I'll physically die. I know that's crazy, but I can't get it out of my head. I associate debt with literal death because it takes money to get the basic necessities of life, and if you're in debt, well, yeah.

I really feel like I'm missing out on life because I've never borrowed money to explore life. I haven't really explored life.

 

Thoughts?

 

 

I am against most debt also, BUT:

I did read in a business magazine that Student Loans are considered GOOD DEBT. It is regarded as an investment. And with the economy being the way that it is, I think it would be wonderful to go back to school to learn a new task and be even more marketable once you complete it and the economy gets better. You will be just that much ahead.

 

I am speaking from experience b/c I am working on a graduate degree and taking out loans. I financed my undergraduate with loans as well. The loan companies are great at working with you with forebearances and deferrments if times get tough. Also, they do report to the credit bureau and the reporting helps alot with raising your credit score. And their interest rates are very low.

You can get the one type of loan where the governement pays the interest, I think it is subsidized. In undergraduate, I put all of my loan money in savings an took it out monthly to pay rent. I made alot of interest, which offset the loan interest. With my graduate loans, I paid off my 9.0% interest car loan with my 3% student loan and saved thousands.

I hope this helps ease your fear of student loans. The Baptist Student Union at college thought I was evil because I took out student loans.

[Crazy Donna]

Sentinel, don't fear debt. Debt is amazing when you know how to use it.

 

I know a bit about finance. I write a finance column for a website. I get people at my work (I work in a factory as a manual labourer) who come up and ask me what to do with their money situations. I'm not a brilliant mathematician, I just know grade six maths, and that's all you really need to know to handle money. So let me give you some advice.

 

There are two different kinds of debt. One is BAD debt. BAD debt sucks donkey balls. By definition, bad debt is any debt that you go into to purchase something that goes down in value. Think about it. Use a credit card to buy a movie ticket? Chances are, fifteen minutes after that movie's started, nobody else is going to want to buy the ticket off you for the $12 you spent. Car loans are the same. Cars go down in value. You buy a brand new Nissan Patrol, drive it out of the car yard, and the second it hits the asphalt, it's gone down in value. Some stuff just goes down in value. These things include cars, boats, caravans, furniture, whitegoods, computers, mobile phones (cell phones if you're an American) plasma screen televisions, clothing, holidays, costume jewellery, fine jewellery (to a degree) cute little jumpers for your dog, sunglasses -- basically, any crappy consumer goods you can think of. Most of the time, unless it's a Monet painting, or a Model T Ford in mint condition that has never been driven and locked up in a shed it's whole life, that stuff is going down in value.

 

If it's going down in value, using debt to pay for it is a BAD idea, because when you borrow money, you pay for the privilege of using that money by paying interest on the loan. So if you borrow $1000 on a credit card to buy a plasma screen television, and the card is charging you 19% interest, over a year, you could pay $190 in interest on the debt. So the television did not cost you $1000. It actually cost you $1190. And now it wouldn't go for $200 at a garage sale.

 

On the other hand, there is GOOD debt. Good debt is my all time favourite kind of debt. This kind of debt will change your life.

 

By definition, good debt is borrowed money that you use to buy something that goes up in value. Like a house. Or very good quality blue chip shares. Or land.

 

If you buy a house for $150K ($150 000) and borrow $120K at 6%, the first year you're looking at an interest bill for about $7200. "Bugger me!" you say. $7200 is a shiteload of money. However, while you've been living in the house for one year, even on minimum payments (which hardly pay any of the loan down, just interest) your house has been slowly going up in value. If you sell it after one year, it's probably not going to go up much more than you paid for it. However, the golden rule with property is to wait between fourteen and twenty one years. Property tends (on average, in Australia at least, and probably other western nations) to increase in value by about 6% a year.

 

The Rule of 72 is a nifty mental trick to tell you roughly how many years it will take something to double in value based on it's interest rate. Divide 72 by 6. (I don't know how it works, it just works. And it will make you look like a genius at dinner parties). 72/6% = 12. After 12 years of living in that house, paying your loan, that house is worth approximately $300 000. By the time you have paid the loan off (25 years, usually) you are sitting on a house worth $600 000. Sure, you might pay a crapload of interest over that time, but if you paid slightly more than the minimum repayments, you could cut a decade off your loan, and most of a crapload of interest. Yeah, I know, crapload is not a scientific term of measurement.

 

http://au.pfinance.yahoo.com/calculators/loan-repayment.html There are some good calculators here that will show you the massive difference a small increase in your payments can make to a loan. They can cut decades off.

 

I am totally serious about this. I'm paying my house off in five years (I'm a masochist and work two jobs, a full time and part time one, for minimum wage) and buying a house was the best thing I ever did.

 

Do not be scared of debt. Debt used wisely (to buy stuff that goes up in value) is like getting a big leg up on the financial ladder. Just make sure you only borrow what you can repay, and have money stashed aside to pay the loan if you're out of a job for a while. It's scary, but exciting.

 

If you've got any financial questions, just contact me. I don't mind answering them.

[.god]

The old distinctions between "good" debt and "bad" debt no longer hold so true anymore, especially in this recent economy.

Home values in the US have dropped between 30 to 50% or more in the past 2 years and things are still really rocky these days. It may take longer than usual for these prices to return to previous levels, if ever. Be careful when taking out a mortgage loan, although these days it can be quite tough to obtain one.

 

Also with the skyrocketing costs of college education, going into debt for education may not be as good of an idea as before. It can become especially bad if you end up with private loans which can not be discharged even thru bankruptcy.

Here is an interesting article and comment section on the sad state of student loans in this country and what people can sometimes get themselves into when life takes an unexpected turn: http://cnnmoneytalkback.blogs.cnnmoney.cnn.com/2008/10/23/student-loan-fugitives/

 

Still though, obtaining 2-3 credit cards is an excellent method to build up good credit. I pay everything with my credit card, as it makes it easier to track my finances, where the money goes, and I obtain points that are equivalent to a cashback of 1-3%. I pay everything off the entire monthly balance on the due date and it makes it much easier to keep a handle on my spending. That sticker shock on each monthly statement can really help you realize how your daily expenditures can really add up over a 30 day period.

Credit cards are so much a part of my life I don't really think of it as going into debt since I treat it like spending cash, but I just get to delay payment up to 30 days (which gives my cash a chance to earn interest or work for me during that time). So it's a win-win as long as you pay off your balance. And I'm not sure why anyone who wants to make the most out of their money would want to end up paying double or more what an item sells for due to crazy credit card interest rates.

[Non-Redneck]

 

 

 

Still though, obtaining 2-3 credit cards is an excellent method to build up good credit. I pay everything with my credit card, as it makes it easier to track my finances, where the money goes, and I obtain points that are equivalent to a cashback of 1-3%. I pay everything off the entire monthly balance on the due date and it makes it much easier to keep a handle on my spending. That sticker shock on each monthly statement can really help you realize how your daily expenditures can really add up over a 30 day period.

 

 

Ditto to this. Get cashback credit cards. If you shop at a particular store, you should see if they offer a credit card that gives 3-5% cashback (Chase has some of these, REI has a 5% cashback card, etc.)