@Saving Diva I think they get a free pass too often, despite being the hardest kind of debt to get out of.

@Writer Dad so true. We mortgage our future to pay for stuff that may not even be around then!

@Meg That happens the more I think about it too. If the woman in your example had had full tuition scholarships, or planned to teach, it might make sense–but yeah, you can be a good social worker with a degree from lots of decent schools, even state schools.

@Kristy It’s a particularly valuable tool when it’s for something that one couldn’t reasonably afford up front. But, as you say, the key is knowing when it’s something you can’t afford at all.

@Stacey Yep, bad math! The deduction is a nice one, but not a good financial plan.

@Coupon Artist Very true. The less debt you have, the fewer expenses you have and the easier it is when you get in tight spots!

@Lefty I’d say that doesn’t count as consumer debt. It’s probably even more respectable than mortgages or student loans, since it was incurred to save your life–which is the best reason to get into debt I can think of! Best wishes on a speedy and complete recovery from the cancer and the debt.

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Actions speak louder than words, no?

I will point out that most non-consumer debt has a potential tax benefit. But as I pointed out to a few friends, who wants to pay $1000 in mortgage interest to get $150 back? It’s just not good math!

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Like you said, people take out mortgages and student loans irresponsibly, too. I think a lot of people justify spending more than they can afford on a house or on their education because it’s “an investment”.

For example, I was watching some show on rising college costs and there was this one lady who was going to Harvard to become a social worker — and paying a king’s ransom for it, which then went into student loans. But it was Harvard and such an honor to be even accepted.

When she finally ran the numbers, she realized that there was no way she could afford to pay off her student loans in the career she chose. But of course, student loan companies don’t care because they know that you can’t bankrupt student loans!

Likewise, the old advice on buying houses — which my husband and I thankfully ignored — was “buy as much house as you can afford”. Yes, we really had otherwise smart and very caring people we love tell us this! The idea is that your income will keep going up as you get raises but your mortgage will stay the same. Plus, your house value will keep going up and up and up, making it a great investment.

As we’ve seen, homes as secure investments were overrated. And sometimes it even makes better sense to rent. But again, people often don’t do the numbers and realize they can’t afford their home until they’re headed into foreclosure.

Studies about credit card use have shown that people tend to spend significantly more when using credit cards instead of cash. I think the same is true with mortgages and student loans — but worse because they have little to no stigma about them. People need to stop seeing them as easy, safe investments (there’s no such thing) and start running the numbers for themselves BEFORE taking on ANY debt.

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I agree with your assessment of debt – something like student debt can be a grey area. Excessive student debt isn’t necessarily any different than consumer debt since the future income of the student probably won’t support it.

It’s hard to draw the line though with student debt.