Posted by Rick Denney on March 25, 2003 at 11:59:45:
In Reply to: Re: Re: Poor HS Student in need of Euphonium posted by Mary Ann on March 25, 2003 at 11:19:08:
Not all debt is bad. Around here, it is nearly impossible for someone without a trust fund to buy a house without a significant mortgage. I nearly fainted when I was transferred to Northern Virginia from Dallas, and discovered that the same house cost literally twice as much, even out here in the very fringe of the area.
At this time, our only debt is the house and one of our three cars.
I have bought a couple of my tubas using debt. The first was the Yamaha F tuba, which I bought by burning a hole clean through a credit card. But I knew what the payments would be beforehand, and I was already making the money to pay them. I've never regretted it. The other was the York Master, which was privately financed over a very short term. I did that because the debt fit better into a sensible plan than did the depletion of cash. The point is that debt is okay, if you do it on purpose. The big mistake people make is not that they use debt, but that they use it in a fit of desire without making sure that it fits into their overall financial plan. That sort of discipline is hard. It is much harder than avoiding the debt in the first place, and it has taken me many years to understand that. (I bought the Holton, by the way, by borrowing the money from savings, and am paying it back as if it were a loan. The difference is that I'm paying me. When the right Holton comes your way, you don't hesitate, if you have always longed for a world-class BAT.)
Joe (and you) are espousing a different ethic than just avoiding debt, however. You are exhorting people to decide what they really want, and spend money on that, and not spend money on what they don't really want. People buy fancy furniture for the living room and then never use the room except when company is there. Or, they buy a fancy home-entertainment system when they barely have time to watch any television that would benefit from the technology (no, we don't need to see Friends in digital surround-sound). Or, they buy a fancy car only so that they can feel smug about the emblem on the trunk lid. There is nothing wrong with any of these, if you can afford them and if you really want them. Most people, it seems, buy that stuff out of the sheer momentum of acquisitiveness, and then wonder why they had to have it when they are still making payments two years later. That momentum carries people into debt beyond what they can handle.
I agree with your ethic utterly, though it has taken me many years to learn the lesson.
Rick "who also had an allowance but who still had to learn much of this the hard way" Denney