To a lot of people in the PF world, being in any type of debt is not acceptable. To others, certain debts are OK to keep around, if not necessarily desirable. My general feeling about debt is that it should be avoided, but if it can’t be, one at least needs to have a plan to manage it wisely. That being said, I hate having debt. In my ideal world I would be totally debt free; however, I know that in the real world, it will take me several years to pay off all my debts. One reason for this is that I simply don’t make very much money, and I’m not looking at a raise any time soon. Another reason is that I also think it’s very important to save for the things I want and need. So I’m saving and paying down debt at the same time, which means that neither is happening very quickly. This means that I need to decide which debts I like the least and pay those off first, then let the others dangle for a while. So I’ve listed my debts below, from the debts that I like the least and want to get rid of quickly, to the debts that I’m basically OK with and will tolerate keeping around for a few years while I save:
Debt I Hate the Most: My Best Buy credit card debt that I paid for my T.V. with. It’s pretty small (~$1000) interest free until May 2011, but it’s still consumer debt. I’m going to have this eliminated within the year.
Debt I Hate Pretty Badly: My smaller (~$5,000) student loan with CitiBank. I hate it because if I had been more careful with my money in grad school, I probably wouldn’t even have had to take it out in the first place. It just annoys me every month when it comes in the mail. Eliminating this debt will be my #1 financial goal for 2011.
Debt I Dislike But Find Tolerable: My car loan (~$8,500). I absolutely love my car and am happy that I have it, even though I had to finance it. Also, the loan only has 3 more years on it, and the car should outlast the length of the loan by several years.
Debt I’m Basically OK With: My larger, federal student loan (~$17,000). I wouldn’t have been able to go to grad school or get the job I have now without this loan. This one will be around for the next several years, but since I’m basically OK with it…I’m basically OK with that.
Wow, it seems like I have a lot of debt when I look at the actual amounts! But most of the above will be paid off within the next 5 years, and I did already pay off the worst debt of all time: my personal loan.
How do you feel about your debts, or debt in general?