Mortgages and Medicine.

Unless you are the dumbest person in the world, you probably have realized I’m not the biggest fan of debt. I think it’s pretty stupid and unlike most PF bloggers, I don’t believe “good debt” exists.

Although I’m a pretty avid debt puncher, I do compromise on two issues…

Home

If you didn’t already know, houses are kind of expensive. The median home price in my zip code is $500,000. Even if Girl Ninja and I were able to stock away a whopping $50,000/yr in savings (which we aren’t), it would take us 10 years before we could pay cash for a house in our hood. And that’s assuming home prices don’t increase during those 10 years we save (which we know it will).

Last year we took on a $280,000 mortgage for our $350,000 home. That means we put 20% down, and financed the remaining 80%.

I would never try to call my mortgage debt “good”, perhaps “necessary evil” is a better descriptor.

Medical

This one goes without saying, and I assume most of you would agree.

If for some reason the crap hit the fan and I was faced with a decision between death or debt, I’m gonna take on some debt. That said, I am doing what I can to ensure I never have to be faced with that choice. I pay a pretty penny for health/dental/vision insurance each month, not to mention I have a decent chunk of change sitting in an emergency fund.

My insurance and savings should significantly diminish the chances of having unpaid medical bills , but on the rare chance I needed to buy an organ on Ebay, you better believe I’d do so. Side Note: How much you think a kidney goes for on the black market? $50K? $100K?

That pretty much wraps up my Tolerable Debt List. I realize my stance may be extreme for some, and for others it’s probably not strict enough. And this leads to today’s question….

Where do you draw the debt line?

What type of debt have you sworn off for good (credit cards, car, mortgage, payday loans)?

What type of debt are you comfortable with (mortgage, cars, 0% credit card offers, etc)?

At what point does debt go from being logical to being ridiculous?


8 thoughts on “Mortgages and Medicine.

  1. Hey every since you had your baby (well around then), I haven’t been receiving your posts via email. Maybe I messed something up on my end but I wanted to let you know in case there was something messed up on your end.

  2. Prophylactic debt that keeps me off TANF. That is acceptable debt. A couple thousand dollars during a lengthy spate of unemployment and couch surfing (NOT referring to computer use, but actual couches and futons). Screwed up my credit rating for a while, but it had been worth it. Medical debt is neck-and-neck with prophylactic debt.

    Mortgage is not applicable here. Neither are kids.

  3. Student loan debt. for me its a necessary evil. by the time i save up for medical school ill be too old to go.

  4. I can feel your pain in regards to mortgage debt. However, as long as you stay vigilant and pay it off sooner than later, you will be sitting in a good spot. After paying off my modest home in 2008, I cannot tell you how liberating it is not paying a house payment every month. There are many who say it is good debt that as inflation goes up your house payment does not but that is ONLY if your pay goes up with inflation too, which, in my case, does not. In general, I feel all debt is bad but stuff happens so debt can be a useful tool in mitigating circumstances…

  5. Depends on how much you want to live on the edge; that’s the bottom line. The proverbial independent filmmakers who max out their credit cards will always be with us …

  6. I’m very okay with car loans ONLY if it’s a 0% situation. Even if I had cash, I’d definitely do the loan at 0%, which is what I did with my current car.

  7. I haven’t sworn off any types of debt, as I’m the type of person to borrow $5 from a five-year old. But there’s a lot I don’t use in everyday life.
    Currently, I have a mortgage and one credit card with a balance. I’m comfortable with that. Add a car payment and I was comfortable with that too.
    But if I were to take my current mortgage and current credit card and add a second credit card balance, I’d be UNcomfortable with that. Not quite sure why.
    As for the logical to ridiculous…
    If you can not accomplish what you want without going into debt and you have a solid plan to get out of the debt, logical.
    If you’re taking on debt just to see how much people will loan you and you have no intention of paying the debt, ridiculous.

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