I don't think I believe that debt is sinful, just that it's a bad thing and to be avoided. It isn't morally wrong to have debts, but it is a bit stupid to borrow money and owe more money in interest as a result. I've always preferred to go without until I could afford a thing in full - I still hate the idea of needing to get a mortgage and feel shaky and upset at the idea of owing that much money (any money). But whether I buy a house or not, I still have to pay money to live somewhere, so it may as well be money that comes back to me (at least in part) eventually.
I'm now in a position where I could pay the remainder off in one go, but I'd be doing it from my savings, & last time I checked the comparative interest rates for my ISA and the student loan, it was not quite worth taking it out of the former to pay off the latter.
I probably did lose out on comparative rates of savings vs loan interest, but I didn't care - not having that debt was more important to me. Similarly, I will be overpaying the mortgage by as much as I can afford, regardless of what I could get elsewhere as a return on the value of that cash. (So clearly my aversion to debt is not just the financial calculation of borrowing money and ending up paying back more than you borrow, hmm. There's definitely a moral dimension to it but I'm not sure what. Maybe innate pessimism leading to financial prudence - I might lose my job and have no income, and then I'll be grateful I made the debt smaller when I could.)
BTW I am frankly amazed that you've managed to save up for a house in 2 years
Obviously I haven't saved all the deposit for a house in just a couple of years - I'd been saving at a lower level for long before that, and all my grandparents are dead and left me money. But if you don't have a small amount to save every month, you don't build up a nest egg, and every month you're further and further behind. It's not £50 per month loan repayments that'll make the difference for today's graduates, it's £50 the first month, £100 the second month, and so on cumulatively with interest.
I hear where you're coming from, but surely that's what you're doing when you pay taxes, too?
Honestly, just tax me more. Income tax is my solution to everything. I already pay it even though I don't have children so that your baby can have child benefit, and even though I'm healthy so that other people can see medical specialists, and even if I've already been to university I'd be fine with paying a bit more income tax so that other people can go. Tax doesn't have to be linked to a specific personal benefit for me to not mind paying it, and I loathe the idea of a graduate tax because of that specific link. It's not OK to pay only the bits of tax that go towards the things you use, and screw everything else.
I think the main conclusion that can be drawn from all this is that I am an irredeemable socialist.
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Date: 2010-12-10 06:29 pm (UTC)I'm now in a position where I could pay the remainder off in one go, but I'd be doing it from my savings, & last time I checked the comparative interest rates for my ISA and the student loan, it was not quite worth taking it out of the former to pay off the latter.
I probably did lose out on comparative rates of savings vs loan interest, but I didn't care - not having that debt was more important to me. Similarly, I will be overpaying the mortgage by as much as I can afford, regardless of what I could get elsewhere as a return on the value of that cash. (So clearly my aversion to debt is not just the financial calculation of borrowing money and ending up paying back more than you borrow, hmm. There's definitely a moral dimension to it but I'm not sure what. Maybe innate pessimism leading to financial prudence - I might lose my job and have no income, and then I'll be grateful I made the debt smaller when I could.)
BTW I am frankly amazed that you've managed to save up for a house in 2 years
Obviously I haven't saved all the deposit for a house in just a couple of years - I'd been saving at a lower level for long before that, and all my grandparents are dead and left me money. But if you don't have a small amount to save every month, you don't build up a nest egg, and every month you're further and further behind. It's not £50 per month loan repayments that'll make the difference for today's graduates, it's £50 the first month, £100 the second month, and so on cumulatively with interest.
I hear where you're coming from, but surely that's what you're doing when you pay taxes, too?
Honestly, just tax me more. Income tax is my solution to everything. I already pay it even though I don't have children so that your baby can have child benefit, and even though I'm healthy so that other people can see medical specialists, and even if I've already been to university I'd be fine with paying a bit more income tax so that other people can go. Tax doesn't have to be linked to a specific personal benefit for me to not mind paying it, and I loathe the idea of a graduate tax because of that specific link. It's not OK to pay only the bits of tax that go towards the things you use, and screw everything else.
I think the main conclusion that can be drawn from all this is that I am an irredeemable socialist.