Author Topic: Is Debt Management Just Part of Being an Adult?"  (Read 10548 times)

amha

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Is Debt Management Just Part of Being an Adult?"
« on: June 10, 2014, 07:08:11 PM »
From The Billfold, the often-annoying, occasionally-interesting, personal-finance-for-millenials site that I can't stop myself from reading:

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Or you can learn how to live with your debt in a way that makes sense to you. For a lot of us, it means regular monthly payments. It may mean monthly payments for decades. But adulthood includes a whole gob of regular monthly payments. No one ever says “get out of Food Debt by learning how to grow all your food by yourself,” or “get out of Internet Debt by building your own servers in your basement or something, I really don’t know how internet works.” ...  We can also kick the bottom out of a big chunk of the Personal Finance Industry, the piece that’s designed to make people feel like jerks for going into debt and for daring to pay interest on stuff that they should have gotten at face value.

http://thebillfold.com/2014/06/is-debt-management-just-part-of-being-an-adult

I was really worried the author was going to start going into a business analogy: "businesses include debt service as part of their budgets, so why shouldn't people?" But of course successful businesses use debt carefully, to make leveraged investments---not to pay their cable bill. To this author, debt is debt, and everyone has it, and everyone's always going to have it, and that's just the way it is!

I'm so frustrated that this is the way my co-generationals (I'm 27) think.

CarDude

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #1 on: June 10, 2014, 07:35:39 PM »
Enablers, all of them!

homeymomma

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #2 on: June 10, 2014, 07:46:07 PM »
He actually referenced MMM in this post? Blasphemy!

arebelspy

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #3 on: June 10, 2014, 07:52:04 PM »
..wow.

To answer the question "Is Debt Management Just Part of Being an Adult?": No.   It is not.

Money management is part of being an adult.

Debt management (from consumer debt) is part of being bad at using money and racking up lots of debt, the same as paying higher insurance premiums is part of being bad at driving and racking up lots of accidents on your record.
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taekvideo

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #4 on: June 11, 2014, 01:09:30 AM »
hmm some of those comments... had to reply hah
someone actually thought MMM wouldn't let them drink beer if they were in any debt... how do people get these impressions?
« Last Edit: June 11, 2014, 01:15:51 AM by taekvideo »

marty998

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #5 on: June 11, 2014, 04:43:17 AM »
I think MMM would say "don't go to the pub and buy beer" if you are in debt.

He would probably advise you to make your own beer in substitution....

GuitarStv

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #6 on: June 11, 2014, 05:56:46 AM »
To answer the question "Is Debt Management Just Part of Being an Adult?": No.   It is not.

See, I'd argue . . . yes, it is.  But the acceptable level of debt that you're managing towards is 0.

golden1

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #7 on: June 11, 2014, 06:32:56 AM »
Shit, this scares me.

I already see the attitude in many of the millennials that I work with.  All of them have at least 5 figure college loan debt and just expect that they will be paying it off for 20 years.  Then they will have  mortgages and car loans.  No real mention of saving for retirement, or even the thought of retirement at all.  Most of them think that they will just work forever. 

odput

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #8 on: June 11, 2014, 07:01:25 AM »
Shit on a stick...even when people concede that student loans are an issue, but other debt shouldn't be, people keep harping on student loans.

And this one:
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I think its not just student loans though, its car payments and mortgages, personal loans

Like we have no fucking control over what car we buy, or (gasp) if we buy a car...and don't even get me started on personal loans...



I'm with ya amha, that way some of our generation thinks is batshit crazy

skunkfunk

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #9 on: June 11, 2014, 07:22:16 AM »
I think MMM would say "don't go to the pub and buy beer" if you are in debt.

He would probably advise you to make your own beer in substitution....

I believe his suggested guideline was maximum of $9/week per person for beer.

arebelspy

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #10 on: June 11, 2014, 07:34:31 AM »
hmm some of those comments... had to reply hah
someone actually thought MMM wouldn't let them drink beer if they were in any debt... how do people get these impressions?

That person admitted they didn't even read the MMM article.  That's one way people get those impressions, they make them up.

Then the writer of the article replied and (incorrectly) confirmed that thy couldn't buy beer.  That's another way people get these impressions, they read them to support what they already want to think.
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NumberCruncher

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #11 on: June 11, 2014, 08:21:52 AM »
Ugh...and then I had to go read other articles on the site...

it's just bad - bad ideas, poorly executed. There's an article about how salad is always so expensive when you eat out titled "Why is Salad So Expensive AND The Solution to the Problem" http://thebillfold.com/2014/06/why-is-salad-so-expensive-and-the-solution-to-the-problem/

Why is it so expensive?
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Sure, it’s about the Farm Bill and subsidies and lobbyists and all that jazz. I have a sneaking suspicion too though that those of us who feel guilty enough to buy salads out, rather than assemble them at home, are being taxed for wanting to appear healthy and/or eat our way to righteousness. Basically, we’re saps.

The solution?
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Either way, I was thrilled to discover the other night that there is a restaurant near me that serves an incredible salad filled with delicious things, including goat cheese, avocado, and corn, for $5. Yeah, you heard me. This salad could make blind see and the lame tap-dance, and it costs five bucks! I will eat there every day forever.

Super useful information there - well researched :P

amha

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #12 on: June 11, 2014, 09:37:02 AM »
Oh, but it gets better: today on The Billfold: HOW MUCH SHOULD I PAY FOR A TAROT CARD READER? http://thebillfold.com/2014/06/how-much-should-i-pay-for-a-star-chart-and-other-key-questions-answered/

Maybe I'm missing something, but this seems completely unironic. I hope that the author's tarot cards reveal an impending facepunch.

Brad_H

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #13 on: June 11, 2014, 10:10:03 AM »
So how much does a home made salad cost to you all?

Brads Preferred Salad (TM)
Head of lettuce: $3 ea / 4 = $0.75
Tomato: $1.50 ea / 2 = $0.75
Carrot: $1.79 bag / 20 = 0.0895
Sunflower Seeds:  $2.50 bag / 40 = $0.0625
Cucumber: $0.69 ea / 5 = $0.138
Croutons: $2 bag / 5 = $0.40
Total of $2.19 + Time

I don't always use dressing but when I do it's only about a tablespoon so I didn't count it.

Now about that Time entry, I value my free Time at $50 an hour but my wife's free Time at nothing so depending on who did the shopping and preparing of said salad...

NumberCruncher

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #14 on: June 11, 2014, 10:35:23 AM »
So how much does a home made salad cost to you all?

Brads Preferred Salad (TM)
Head of lettuce: $3 ea / 4 = $0.75
Tomato: $1.50 ea / 2 = $0.75
Carrot: $1.79 bag / 20 = 0.0895
Sunflower Seeds:  $2.50 bag / 40 = $0.0625
Cucumber: $0.69 ea / 5 = $0.138
Croutons: $2 bag / 5 = $0.40
Total of $2.19 + Time


But Brad_H - you have to buy all those ingredients in the first place! And then they'll start rotting before you finish them all!!! It's simply cheaper to eat salad out! (so says the comments to that article...honestly, even a single person should be able to finish a head of lettuce in the 3-5 day freshness window, and that's the ingredient with the smallest shelf life...)

Another thread talked about salad costs and transportation: http://forum.mrmoneymustache.com/share-your-badassity/jar-salad-a-la-costco/msg303304/#msg303304  ~ $2.55 is what Hybrid figured for his salad.

I can't really remember the last time I ordered salad at a restaurant - it's just such a rip off, and usually inferior to what I can get at home.

Oh, but it gets better: today on The Billfold: HOW MUCH SHOULD I PAY FOR A TAROT CARD READER? http://thebillfold.com/2014/06/how-much-should-i-pay-for-a-star-chart-and-other-key-questions-answered/

Maybe I'm missing something, but this seems completely unironic. I hope that the author's tarot cards reveal an impending facepunch.

omg...and at the end of the article they make fun of crystal balls - like everything else they talk about is perfectly reasonable...*twitch*

arebelspy

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #15 on: June 11, 2014, 07:24:01 PM »
Oh, but it gets better: today on The Billfold: HOW MUCH SHOULD I PAY FOR A TAROT CARD READER? http://thebillfold.com/2014/06/how-much-should-i-pay-for-a-star-chart-and-other-key-questions-answered/

Maybe I'm missing something, but this seems completely unironic. I hope that the author's tarot cards reveal an impending facepunch.

omg...and at the end of the article they make fun of crystal balls - like everything else they talk about is perfectly reasonable...*twitch*

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warfreak2

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #16 on: June 12, 2014, 03:59:37 AM »
omg...and at the end of the article they make fun of crystal balls - like everything else they talk about is perfectly reasonable...*twitch*


James Randi wrote a book called Flim Flam, which debunked a collection of these sorts of errors. He said he was often approached by people who told him that the rest of his book was great, but the chapter about their preferred error was dead wrong. People who believe in things like astrology generally aren't totally irrational or lacking common sense; they just switch it off in that one context.

dcheesi

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #17 on: June 12, 2014, 05:49:51 AM »
See, this is another reason why the current state of higher end scares me. When you start your adult working life already saddled with major debt, it desensitizes you to the pain and limitation of being in debt. And that makes it easier to justify going into even more debt.

homeymomma

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #18 on: June 12, 2014, 06:20:19 AM »
See, this is another reason why the current state of higher end scares me. When you start your adult working life already saddled with major debt, it desensitizes you to the pain and limitation of being in debt. And that makes it easier to justify going into even more debt.

Why is this so f-ing true? My husband and I bought a new car right when I graduated, with over 30K in SL debt. It was like, well a new car is a lot, but we already have 2x that much in student loans and even higher SL monthly payments... Guess this is just part of the deal.

rocksinmyhead

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #19 on: June 12, 2014, 09:08:12 AM »
god, what the fuck is wrong with this fucking website?!!?!!!?? I hate that millenials are associated with this shit!

the salad "article"... just... ahhhhhhhhh! clearly you fuckers are eating salad more than once a week so I don't know what this "it rots in my fridge" whiny bullshit is all about. you don't have to buy your salad ingredients in fucking wholesale quantities! and learn to store your greens properly, it's a game-changer! I recently decided to stop being lazy about this, and my last bunch of swiss chard lasted two weeks (probably woulda lasted longer but I ate it all up... it was a huuuuuge bunch too) and I have arugula in my fridge that's going on three weeks. THREE WEEKS MOTHERFUCKERS! if you can't use up a bag of greens in three weeks then you are LYING about liking salad. oh yeah and did I mention that these enormous bundles of greens cost me $5 TOTAL at the farmer's market?!!? that's right, for the price of ONE of your stupid bourgie salads I had GREENS FOR DAYS!

don't get me wrong, I'm not perfect, I'm still in the process of weaning my boyfriend off those pricy bagged salad kits, but at least we sure as fuck don't go to a restaurant on a weeknight to order a SALAD!

/end unreasonable salad rant

rocksinmyhead

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #20 on: June 12, 2014, 09:12:46 AM »
oh god and this comment:

"I tell myself I could make my salad at home, but the thing that really makes these salad places worth it for me is the chopping. I don’t know what the chopping does, exactly, but it makes a salad 300% tastier. And you can’t exactly chop it in the morning when you pack it, or chop it at your desk. So that’s how they get me.

I think I'm not getting why you can't chop it in the morning? or fuck, just chop all the greens when you buy them and then store them washed and chopped? (this is what I do usually because I am lazy and it increases the likelihood that I will eat salad) or fuck, I don't know, just tear them up with your fingers?!? (I do this too)

je sus fuck

what is wrong with these people?!

thankfully there are at least some rational/helpful comments that are making my head not completely explode

Jamesqf

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #21 on: June 12, 2014, 11:01:26 AM »
See, this is another reason why the current state of higher end scares me. When you start your adult working life already saddled with major debt, it desensitizes you to the pain and limitation of being in debt. And that makes it easier to justify going into even more debt.

I don't think that's the reason.  At least, it didn't work that way for me.  Granted, my student loans were probably on the low side, but still, having that debt haning over my head bothered me, and so I paid them off in 2-3 years after graduating.

I think MMM would say "don't go to the pub and buy beer" if you are in debt.

He would probably advise you to make your own beer in substitution....

I believe his suggested guideline was maximum of $9/week per person for beer.

Sheesh, just how important is beer?  (Or even wine & cider, which I prefer.)  Sure, I enjoy one now and then, but in my personal list of priorities, it's way below chocolate, and even chocolate would get cut way back if I was in a debt emergency.

homeymomma

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #22 on: June 12, 2014, 11:07:25 AM »
My train of thought concluded, I guess he'll just have debt until he dies? And that got me wondering... What happens to debt when you die? We have a family member who owes quite a bit to the irs, like, a lot. He's not on his deathbed or anything, but it has come up in conversation. What happens to the debt if the indebted person dies?
« Last Edit: June 12, 2014, 02:54:13 PM by homeymomma »

arebelspy

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #23 on: June 12, 2014, 11:13:09 AM »

omg...and at the end of the article they make fun of crystal balls - like everything else they talk about is perfectly reasonable...*twitch*


James Randi wrote a book called Flim Flam, which debunked a collection of these sorts of errors. He said he was often approached by people who told him that the rest of his book was great, but the chapter about their preferred error was dead wrong. People who believe in things like astrology generally aren't totally irrational or lacking common sense; they just switch it off in that one context.

That's hilarious.
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Cpa Cat

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #24 on: June 12, 2014, 11:25:29 AM »
Quote
No one ever says “get out of Food Debt by learning how to grow all your food by yourself,”...

I do... My salad only costs 25 cents... because I buy olives. Everything else is free from the garden. It also takes me less time to make a salad than it does to stand a register to pay for one.

Eric

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #25 on: June 12, 2014, 12:05:33 PM »
Sheesh, just how important is beer?  (Or even wine & cider, which I prefer.)  Sure, I enjoy one now and then, but in my personal list of priorities, it's way below chocolate, and even chocolate would get cut way back if I was in a debt emergency.

Now imagine a nice rich stout brewed with chocolate.  Combining those should make that jump right up your list.  Mmmmmm.  I think you'll now agree that it's super important.

GuitarStv

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #26 on: June 12, 2014, 01:07:12 PM »
My train of thought concluded, I guess he'll just have debt until he dies? And that got me wondering... What happens to debt when you die? We have a family ember who owes quite a bit to the irs, like, a lot. He's not on his deathbed or anything, but it has come up in conversation. What happens to the debt if the indebted person dies?

My retirement plan involves taking out the biggest loan possible with my fantastic credit at about 80 or so and living like a king until death wipes the slate clean.

Brad_H

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #27 on: June 12, 2014, 01:29:45 PM »
My train of thought concluded, I guess he'll just have debt until he dies? And that got me wondering... What happens to debt when you die? We have a family ember who owes quite a bit to the irs, like, a lot. He's not on his deathbed or anything, but it has come up in conversation. What happens to the debt if the indebted person dies?

Well if you have a family ember you should douse him before he catches something on fire, also I'm sure debt is first paid from the estate and anything remaining is cleared here in the US anyway. It gets complicate if the heirs want to hold on to anything that could be liquidated or if they cosigned any loans, co-mingled (heh mingled) etc.

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #28 on: June 12, 2014, 02:04:48 PM »
I overheard a student at work today saying, "Yeah, but it's just ridiculous this idea that you can pay back this huge amount."  This wasn't a comment against taking on student debt but a reflection of many students that it's an impossible task.  And I think the subtext is that it was somebody else's responsibility.  Either schools shouldn't charge so much or lenders shouldn't hold you to it, was my interpretation.

So, yeah, I can see how carrying debt for the rest of your life has been normalized among young people.

dcheesi

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #29 on: June 12, 2014, 02:42:05 PM »
See, this is another reason why the current state of higher end scares me. When you start your adult working life already saddled with major debt, it desensitizes you to the pain and limitation of being in debt. And that makes it easier to justify going into even more debt.

I don't think that's the reason.  At least, it didn't work that way for me.  Granted, my student loans were probably on the low side, but still, having that debt haning over my head bothered me, and so I paid them off in 2-3 years after graduating.
True; I myself had a few $K in student loan debt. But I think it was different for us, because the amount was small enough that we could see light at the end of the tunnel. Our debt was a short/mid-term annoyance at worst, and it was reasonable to expect to pay it off in a few years with just a bit of penny pinching.

These kids are graduating with more in debt than they make in a year, even if they land their dream job. I think the totals start to seem insurmountable, and a sort of learned helplessness sets in. "We'll never get out from under all of this debt, and any money we set aside would just sucked up by the payments. So what's the point in trying to save, or in depriving ourselves just to avoid a little more debt on top of that?"

rocksinmyhead

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #30 on: June 12, 2014, 02:45:59 PM »
See, this is another reason why the current state of higher end scares me. When you start your adult working life already saddled with major debt, it desensitizes you to the pain and limitation of being in debt. And that makes it easier to justify going into even more debt.

I don't think that's the reason.  At least, it didn't work that way for me.  Granted, my student loans were probably on the low side, but still, having that debt haning over my head bothered me, and so I paid them off in 2-3 years after graduating.

definitely agree, Jamesqf. and mine were on what I thought was the high side (at least for a bachelors), but I am on track to have them paid off 25 months after finishing school. like I think I've heard someone else on here say, when I started paying them back and realized how insane the balance actually was, it really lit a fire under my ass and actually got me more enthusiastic about personal finance. not saying I don't still wish I hadn't had the debt, but I do think it motivated me into a more frugal lifestyle.

update upon seeing dcheesi's second comment: hmm, that could definitely be part of it, since even though I think my debt was pretty high it was still <75% of my starting gross salary, so I wasn't feeling like "OMG it will be IMPOSSIBLE to pay this off in less than 50 years."

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #31 on: June 12, 2014, 02:51:53 PM »
Now about that Time entry, I value my free Time at $50 an hour but my wife's free Time at nothing so depending on who did the shopping and preparing of said salad...

 I have not laughed that hard in a while... thank you sir

Jamesqf

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #32 on: June 12, 2014, 06:38:14 PM »
True; I myself had a few $K in student loan debt. But I think it was different for us, because the amount was small enough that we could see light at the end of the tunnel. Our debt was a short/mid-term annoyance at worst, and it was reasonable to expect to pay it off in a few years with just a bit of penny pinching.

These kids are graduating with more in debt than they make in a year, even if they land their dream job.

That's true only of a relative handful, the ones who have done crazy things like borrow to go to expensive private colleges instead of their state university.  And of course that kicks up the average: if one borrows $110K for Harvard, and 10 each borrow $10K for their local school, suddenly the average student loan debt is $20K.  But the 10 are probably not going to have much problem paying off their loans.

MrsPete

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #33 on: June 12, 2014, 07:08:24 PM »
To answer the question "Is Debt Management Just Part of Being an Adult?": No.   It is not.

See, I'd argue . . . yes, it is.  But the acceptable level of debt that you're managing towards is 0.
I'm thinking along the same lines.  Few of us are trust fund babies, so most of us are going to end up borrowing early in our lives -- at least for a house, probably for a car.  A proper goal, of course, is to work towards eliminating those debts as soon as possible -- and then accumulating money that can be invested and work for you. 

Hopefully we all spend as little time as possible in the debt-phase of our lives, and then we never return to it . . . but, yes, managing it well and working towards 0 debt is necessary at least for a while. 

arebelspy

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #34 on: June 12, 2014, 07:16:50 PM »
To answer the question "Is Debt Management Just Part of Being an Adult?": No.   It is not.

See, I'd argue . . . yes, it is.  But the acceptable level of debt that you're managing towards is 0.
I'm thinking along the same lines.  Few of us are trust fund babies, so most of us are going to end up borrowing early in our lives -- at least for a house, probably for a car.  A proper goal, of course, is to work towards eliminating those debts as soon as possible -- and then accumulating money that can be invested and work for you. 

Hopefully we all spend as little time as possible in the debt-phase of our lives, and then we never return to it . . . but, yes, managing it well and working towards 0 debt is necessary at least for a while.

As I said in my post, that's money management.  Debt management is managing debt and continuing to do so indefinitely, IMO.  Getting rid of debt is not "managing it," (i.e. juggling it) the former of which we around here shoot for, the latter of which they're advocating for.

Semantics and terminology.  But I think you both and I agree with each other on debt, I just interpret their "managing" it as juggling it (more or less) indefinitely.  That's what I think they're advocating as "part of being an adult" and it's something I disagree with.
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cbgg

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Re: Is Debt Management Just Part of Being an Adult?"
« Reply #35 on: June 25, 2014, 04:55:04 PM »
Holy crap, that is a terrible article.  I expected the author to be ripped to shreds in the comments, but I guess that's not the type of audience that site attracts.  Sad.

But it kind of bugs me that people are making this a millennial issue.  This is not a generational attitude, it's a problem in our North American culture in general.