I’m 18 and don’t really know much about this yet, but from what I’ve seen, avoiding debt seems pretty simple… or is it? Why do people buy things they can’t afford? Like, if you need to make monthly payments for a car, doesn’t that mean you couldn’t afford it in the first place? Why not get a cheap used car for $5k or a smaller new car for $10-20k? Why go for one that’s $60k? I don’t get it. I’d love to understand, but I feel like I won’t make those kinds of choices.
It’s good that you’re thinking about this now. I hope you can avoid debt, but sometimes life throws curveballs. People lose jobs, face medical emergencies, or deal with unexpected expenses. Inflation and rising costs also make it tough to stay ahead.
Or even a new car for 10-20k?
Most new cars these days start closer to $20k or more. Even used cars are pricey right now because of the market. Starting to learn early is smart, though.
@Charlie
The system also encourages debt. Building credit often involves borrowing money, even if it’s something small like a credit card. Without credit, life gets a lot harder. It’s all set up to keep us borrowing and spending.
@Ashwin
I’ve got great credit, but honestly, it just means I could easily go into way more debt if I wasn’t careful. Stick to borrowing only for things like a home or something valuable, not cars that lose value fast.
@Charlie
The average cost of a new car is around $48k now. It’s wild.
Dustin said:
@Charlie
The average cost of a new car is around $48k now. It’s wild.
That’s brutal.
It’s true that people overspend on cars, but going too cheap can backfire. A $5k car might need expensive repairs soon, and if you can’t afford those, you could end up in debt anyway. And sometimes, debt is better than being homeless if you can’t afford rent.
@Aven
Been there. I used to only buy cheap cars, but they always ended up costing me more in maintenance. I finally stretched my budget and got a slightly more expensive one, and I’ve saved so much on repairs. Sometimes spending more upfront really does save money.
@Aven
This is the harsh reality of being broke. Cheap cars break down, and if you don’t have the tools or a place to fix them yourself, you’re stuck.
@Aven
Buying a new car on debt is just a bad move for most people. There are smarter ways to spend that kind of money.
Dacey said:
@Aven
Buying a new car on debt is just a bad move for most people. There are smarter ways to spend that kind of money.
No one said otherwise. Let’s not twist words here.
There’s a big difference between debts like medical bills, credit cards, and loans for things like homes or cars. Medical debt is often unavoidable. Borrowing for a house or a reliable used car can be a smart move if it’s planned well. It’s all about knowing what adds value versus what just drains your money.
@Phoenix
Engagement rings are another area where people overspend. You can find affordable options that still look amazing if you shop smart. But going into debt for one is just not a good idea.
Life has a way of throwing unexpected expenses your way. You can’t always budget for everything, and debt often just piles on top of existing problems.
Harlem said:
Life has a way of throwing unexpected expenses your way. You can’t always budget for everything, and debt often just piles on top of existing problems.
You can budget for everything, but it’s another story if your income doesn’t match your budget.
Harlem said:
Life has a way of throwing unexpected expenses your way. You can’t always budget for everything, and debt often just piles on top of existing problems.
As someone who rents and doesn’t have a car, I don’t really see how unexpected expenses would lead to debt. Maybe I’m missing something?
@Keir
What about helping out a family member in need?
@Keir
Medical bills are a big one.
Sometimes, things like car repairs or medical emergencies force people into debt. Other times, it’s just bad financial habits. A lot of folks live paycheck to paycheck, and when something goes wrong, it spirals out of control.