Debt in the Vortex?
Years ago when I balked at continuing work with my coach because I didn’t want to charge $1,000 on my credit card, she reminded me of the concept of good debt versus bad debt.
She said that investing in yourself is good debt. Which was not the rule I watched my parents live by: “don’t spend money you don’t have.”
And as a financial planner, I was taught lots of distinctions about what makes for good debt versus bad debt.
But it’s not that black and white.
For example, most folks would probably agree that these types of loans are good:
- Student loan
- Vet bill
- Home mortgage
- Small business loan
- Borrowing $100 to turn your luck around at the casino
- Spending grocery money on lottery tickets
- Credit card debt
- New car loan
- Plastic surgery
- Time share vacation loan
- Mall shopping spree
We’re pretty good at knowing the difference, right? Schooling, medical care, shelter, business investments … if you’re going to spend money you don’t have, that’s the right way to do it.
And money spent on ridiculous things like expensive vacations and vanity surgeries is bad debt, right? We all know we shouldn’t spend money we don’t have on depreciating assets or frivolous experiences.
But savvy deliberate creators know it’s not that simple.
The difference between good debt versus bad debt is how you feel about it. Not what it’s for.
Or even what it results in.
If I can borrow $100 from mom to blow it on the blackjack table in 20 fast minutes, but I love every minute of it and feel great about that spending before during and after – I’m in the vortex, baby. And that’s good.
And if I fund my brilliantly inspired dream with a small business loan that
- I’m terrified about not being able to pay off,
- believing it’s putting my family’s assets in jeopardy,
- constantly stressing about how to manage my nervous spouse
… I’d have been better off doing something that wasn’t so negatively charged for me.
What we’re talking about is debt in the vortex versus debt out of the vortex.
My suggestion is you don’t just assume that money spent “this” way is good and money spent “that” way is bad. But rather pay attention to how this opportunity to spend makes you feel.
Key words: How You Feel. Not how it makes mom feel, or not what the hubby thinks about it. How it makes YOU. FEEL.
Joe Dominguez’s book Your Money Or Your Life taught me it’s okay not to want to a nicer house and bigger car if that’s not what I care about. If what matters to me is buying new books from the bookstore instead of borrowing from my local library, then that’s money well spent. For ME.
And if I find the most peace by mortgaging my house to pay for two hip replacement surgeries on an eight year old foster dog, guess what? No one else can label that irresponsible or emotional spending! That’s me in my vortex. And you can’t go wrong in there!
Which is also why I’d do well to reserve judgment for people who sink money into law suits against former loved ones, or friends who spend rent money on bookies, or family members who make cigarettes a higher priority than their dog’s arthritis pain pills.
Not just because technically it’s not my business, but because what matters about how we incur debt is the feeling, not the purpose.
In fact, when the purpose IS the feeling, we may find we have entirely new spending priorities along with much better results in life.