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I have no idea why you keep yapping about a budget as if it says anything about how debt influences your financial decisions. You already have debt and you know you can accumulate more if you want to, hence debt and its availability are tacitly built into your budget.
Now, I can predict the response, "no it isn't...because I have a budget". But you are just begging the question, namely, how does your existing debt and the possibility of accumulating new debt effect your budgetary choices?
Furthermore, you want to believe that the seduction of debt only applies to people that can't form a budget or spending what you can't afford. This is hogwash... Budgetary choices are made with knowledge of debt and someone stupidly spending an extra $4k because of debt whether they can afford it or not is making is hurting themselves.
Anyhow, I really don't care how much debt you accumulate.
i don't use my ability to accumulate more debt as a substitute for cash though. i have income. i have fixed, recurring expenses. i have other expenses (restaurants, vacations, gifts, household repairs, auto maintenance) that aren't fixed, but i still budget a specific amount for. sometimes i use less, and i carry that excess forward and eventually, we treat ourselves to a more expensive restaurant if we want.
my existing debt of my student loans doesn't really influence my budgetary choices except for where i choose to spend less of my income and direct it towards paying off the 3.5% early, but not immediately. my car loan debt has cash sitting in my savings that can pay it off tomorrow if i so chose. same with the furniture i ordered recently, with 6 months 0% interest. the only debt I have that I cannot pay off tomorrow is my mortgage, and my student loans. i could change my spending habits to put substantially more on my student loans, but i do not believe that is prudent with the 1.625%, but i probably should get more accelerated with the 3%, though that's still cheap to me. my mortgage at 3.875%, i'll pay it off early, but i'm not in a huge rush.
i don't see what you mean about spending "spending an extra $4k because of debt".
i'm not advocating that people spend an extra $4k because of debt. one should never spend money on something "because of debt", in my opinion, excluding college and a mortgage, and maybe their first car (though i'd probably say, buy a cheaper car for first car until you have more money saved up).
but this is completely different than me setting aside $100/month for furniture for 2 years, then having $2400 to spend on furniture...going and picking out the furniture, keeping it within my budget, and then being presented an opportunity to hold onto my $2400 for 6 more months while the company gives me 6 months to pay them. it's not like i say...oh....throw in another couch! i'm spending $2400 either way....it's just whether company ABC takes it today, or 6 months from today. i'll part with money later than sooner any day of the week, given the option.
i'm not advocating that people spend an extra $4k because of debt. one should never spend money on something "because of debt", in my opinion,
Really? You don't say? As if people go shopping and think "Hey, I can spend $4k because I can take out debt". That isn't the issue, the issue is the psychological seduction of debt in one's finances and budgetary choices.
The discussion about your personal finance is utterly pointless, not only is it boring, but no matter how much research one shows you about the psychological effects of debt you will continue to think you're the exception...all because you can "budget". As if, everyone else cannot.
its like some kind of insane irrational hatred of debt.
As apposed to a love-affair with debt? I don't have either, I will use debt when appropriate, buying consumption items isn't an appropriate use of debt.
Really? You don't say? As if people go shopping and think "Hey, I can spend $4k because I can take out debt". That isn't the issue, the issue is the psychological seduction of debt in one's finances and budgetary choices.
The discussion about your personal finance is utterly pointless, not only is it boring, but no matter how much research one shows you about the psychological effects of debt you will continue to think you're the exception...all because you can "budget". As if, everyone else cannot.
anyone can budget...not everyone does. anyone that doesn't follow a budget is at risk of spending more than they make. whether they make $30,000 or $300,000. if one doesn't budget their finances, they expose themselves to those pyschological risks.
if the discussion is pointless and boring...why do you keep going? you've shown me zero research, just responded to my postings. i have the only research i need...my own results in limiting my debt, and always having enough cash to cover my expenses, and then some.
its like some kind of insane irrational hatred of debt.
yeah. he'll use debt for candy bars (like he likes to say we do), but only if it's on a 30-day cycle. he refuses grace periods longer than 30 days, because it's too hard to manage on anything other than monthly.
and somehow, because we do, that means we have a love affair with debt? we'll continue to use free and low cost money to our benefit. it's his loss if he doesn't want to put the effort into it.
anyone can budget...not everyone does. anyone that doesn't follow a budget is at risk of spending more than they make. whether they make $30,000 or $300,000. if one doesn't budget their finances, they expose themselves to those pyschological risks.
Budgeting doesn't protected you from the psychological risks of debt, again, you are not making your budget in a void and you both have existing debt and know you can accumulate more.
Quote:
Originally Posted by bradykp
yeah. he'll use debt for candy bars (like he likes to say we do), but only if it's on a 30-day cycle. he refuses grace periods longer than 30 days, because it's too hard to manage on anything other than monthly.
Yep, I do things on a net-30 basis, if you want to call that debt go for it. But my arguments here have little to do with it being "too hard to manage", that is just your straw-man, instead I've suggested that the debt is seductive and distorts your finances. It does the same thing in business.
Anyhow, I have strict guidelines for debt, in personal finance I just don't bother with it. Not worth it. In business I'm more open to its use, but only if particular conditions are met. A "no debt" policy is far safer than a "take whatever loan I can get for <4% policy".
Budgeting doesn't protected you from the psychological risks of debt, again, you are not making your budget in a void and you both have existing debt and know you can accumulate more.
Yep, I do things on a net-30 basis, if you want to call that debt go for it. But my arguments here have little to do with it being "too hard to manage", that is just your straw-man, instead I've suggested that the debt is seductive and distorts your finances. It does the same thing in business.
Anyhow, I have strict guidelines for debt, in personal finance I just don't bother with it. Not worth it. In business I'm more open to its use, but only if particular conditions are met.
your net-30 is debt, just like my net-180 is. you don't pay interest on net-30, and i don't pay it on my net-180.
i budget based on my income...not based on what available credit i have access to. our existing debt is student loan debt and mortgage. the only other "debt" i have right now is a car loan at extremely low cost, and a no-cost net-180 term for my furniture, of which i can pay for today if i so chose to part with the money earlier than i need to. same with the car.
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