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I used to have this opinion, and I try to take as little debt as possible. However, I've change my opinion in recent years, and I now think it's based on a priv

I used to have this opinion, and I try to take as little debt as possible. However, I've change my opinion in recent years, and I now think it's based on a privileged position that not everyone is in. Buying a new phone today rather than once I've saved up is a luxury, but buying a replacement phone today rather than being without a phone for ~months while saving up could bring with it significant costs – making it harder to access employment, healthcare, or to socialise. Similar examples would be things like car repairs. Cash flow is worth something, businesses have known this forever, and people living paycheck to paycheck are typically experts in how to make their money work as well as possible because they're so close to the edge. I trust them that if they think this is the best option for them, it probably is. Payday loans are in the same category here (and businesses call them "commercial paper"). Now, I'd love to live in a society where this isn't necessary, but that's not the world we live in, so I'm in favour of these things being available for those who need them.

SoftTalker 4y ago
A more practical version of this rule is "don't use long term debt to pay for short-term expenses" When buying a car, or house, or maybe something like a phone that you will use continuously for a number of years, you can make an argument that it's OK to pay for that item over the same time period. Where people get into more trouble is buying consumable stuff like clothes, food, etc. on to a credit card that they don't pay off every month, and then they end up paying for a box of macaroni or package of underwear over many years (at typically double-digit interest rates).
- mixmastamyk 4y ago
  Yes, goal should be to use debt to buy appreciating assets, not depreciating ones.
  - SoftTalker 4y ago
    Of the things most people buy, only houses really fall into that category, and even that is not guaranteed. Cars depreciate at a frightening rate.
oogetyboogety 4y ago
Payday loans are in the same category but in terms of predatory financial options i feel as though they are a million times worse. I even question how apps like Dave work on this type of model.

SoftTalker 4y ago

A more practical version of this rule is "don't use long term debt to pay for short-term expenses" When buying a car, or house, or maybe something like a phone that you will use continuously for a number of years, you can make an argument that it's OK to pay for that item over the same time period. Where people get into more trouble is buying consumable stuff like clothes, food, etc. on to a credit card that they don't pay off every month, and then they end up paying for a box of macaroni or package of underwear over many years (at typically double-digit interest rates).

mixmastamyk 4y ago
Yes, goal should be to use debt to buy appreciating assets, not depreciating ones.
- SoftTalker 4y ago
  Of the things most people buy, only houses really fall into that category, and even that is not guaranteed. Cars depreciate at a frightening rate.

oogetyboogety 4y ago

Payday loans are in the same category but in terms of predatory financial options i feel as though they are a million times worse. I even question how apps like Dave work on this type of model.