Here's a nice MSN article on how we feel about debt. Some of the quotes they have from message board posters is a real eye opener.
"The people who have a game plan are much less likely to wind up in trouble again,So says the author of Credit Card Nation, which by the way was a dreadfully dry book. Why? Are we so entrenched in debt that we can't even imagine that we can live without it?
Marie thinks so. She writes
A reader posting as "Marie38" believes that "being totally debt free is impossible." She makes $42,000 a year, and savings and 401(k) contributions are automatically deducted. Marie38 does not defer vacations and other extras, although she does pay cash. "My plan is to live while I am still young enough to do it," she wrote. "No one can predict the future. . . . None of us are guaranteed even one more day."Marie has her head in the sand. She has the "have it now" attitude that plagues people. How old is Marie? We don't know, but we do know that she will never be debt free. More and more people are realizing that paying the bank is stupid; banks should be paying you! Yet Marie will never experience this, not because she only makes $42k a year, but because she has already given up. The banks have broken her. She may have a nice retirement portfolio, and plenty of savings, but she will always owe something to someone. She will never own a home, or a car, or any big ticket item. She will always be in debt because she cannot fathom using patience and sacrifice in order to break the debt cycle and make her money for for her.
Or take Beangal, who is living in perpetual debt even though she's trying.
Sometimes, life teaches us financial lessons. A reader posting under the name "Beangal" ran up credit card bills in her 20s, paid them all off -- and then "got right back in." Recently, she wiped out her consumer debt by refinancing her home. She now evaluates every purchase and steadily funds both savings and retirement. "I'm just smarter about my money now," Beangal concluded.Beangal wants to change, but she hasn't. She paid off her debt, then racked it up again. Then (and even MSN doesn't catch this one) she continued to feed her debt by transferring it, rather than paying it off. She didn't learn from her mistake and she made another one! Refinancing and consolidating your debts does not wipe out your debt.
What, please tell me, is the difference between consumer debt and real estate debt? The interest rate? Heck, you can get a 0% balance transfer credit card. Beat that with a 6% mortgage rate. The interest tax deduction? Why am I going to pay a dollar in interest to get back 20 cents? This is a sign of a perpetual debtor. Beangal isn't "smarter with her money". If she were smarter, she would have attacked the debt, paid it off, and started to pay down her house. Beangal will only have wiped out her "consumer debt" if she sells her house. This is the lie that banks feed us and so many people fall for. Beangal fell for it just like millions of others. My own mother fell for it!
Houses are not banks. The only way to eliminate debt is to pay it off with your income. If you want to be debt free, and anyone can be debt free, you need to stop thinking like a debtor. So are you going to be a slave to the banks, or are you going to get rid of debt and make your money work for you?