Should We Still Be Spending Money And Having Fun While Deep In Consumer Debt?

Consumer debt is bad. Please don't accumulate credit card debt and other debt if you want to achieve financial freedom.

During the depths of the financial crisis, one of the proposals I sent to the Obama administration was to institute spending curbs based on high school or college grade point averages.

It didn't matter whether you went to Community College or UC Berkeley since everybody's circumstances are different. What matters is how well you did in school to justify want based spending as opposed to need based spending.

Grades Don't Matter!

For example, if you were a D+ student (sub 2.0 GPA out of 4.0) you are only allowed to buy generic clothing and ride public transportation to work for the rest of your life. No car or lollipops for you. If you were a B student, then suddenly that new $20,000 Honda Civic is available to you after the dealer scans your ID to check the government GPA database.

If you are an A student, then you are free to buy whatever you want because logic dictates that if you are smart enough to study hard in school then you are smart enough to practice good financial habits.

I was shocked Obama never acknowledged my letter because my proposal would only help the government expand their authority (think PRISM) over the people of this great nation. We voted for Big Government and I wanted to support the cause as much as possible as I figured out a way to go John Galt.

Although Washington DC stayed silent, fellow patriotic Americans voiced their opinions in the comments section of the post, Tax Rates Based On Work Ethic Shall Fix The World. It's all about creating incentives.

A Rational World We Live In With Lots Of Consumer Debt

Just imagine a world where everything is rational. Imagine everybody reading their mortgage contracts before signing so that they are aware of their financial obligations instead of blaming others when they can't pay. Imagine if everybody adopted the attitude of not deserving something until worked for?

Now imagine a country where everybody is middle class and pitches in to support our country. There would be no socioeconomic warfare, just equality. We can always dream right?


Losing over $300,000 in wealth directly as a result of my actions is depressing when I start to think about all the things I could buy or experience. In order to get back to even, I taped up all my bad trades and wanton purchases on my wall to prevent me from making more unwise purchases.

I don't think I bought a single material item over $200 during the 2008-2009 financial crisis. Instead, I poured my heart out into writing articles on this site. Each letter typed made me feel a little bit better. Every story I heard about a reader going through a similar situation made me want to write more. Distracting my mind from financial loss in this online world numbed the pain.

When we felt solid signs of recovery in 2010 I finally opened up the wallet and bought some tailored clothes while I was overseas on business. It felt strange to finally spend money on a want again.

Keeping Financial Decisions Within

The thing that made me feel slightly better about my lost wealth was the fact that I didn't hurt anybody in the process. Buying an overpriced car enriched the saleswoman and the dealership. Buying stock at too high a price meant someone else got to sell at a higher price. At least I didn't get my friends and family into my disaster stock. Buying a vacation property meant the sellers got to avoid another 15% decline. The only person I really hurt was myself.

If I decided to default on my mortgage, I would be hurting the neighboring property owners. If I racked up huge credit card debt, the credit card company would probably charge higher interest rates overall to cover their rising non performing loans. Ever wonder why the best credit card rates are still around 10%?

This is where huge government oversight comes in to try and regulate the heck out of the finance industry so that innocent people don't suffer. Borrowing rates and spending abilities based on work ethic and grades doesn't seem like a bad idea now does it?


Although I never got into consumer debt, I liken my wealth destruction similar to getting into $300,000+ in consumer debt. The only way to get yourself out of a hole is to first stop digging and then call in AirWolf with a drop down ladder. Here's a post on where I rank debt from worst to best.

I felt an enormous amount of guilt purchasing anything after my poor investments, so I didn't for two years. I kept on telling myself, “How could I deserve these new pair of shoes or this vacation when I was so stupid with my finances?My net worth tracker was flashing red warning signs and I just could spend.

There are some who think with an entirely opposite mindset. Taking on debt is a great way to live beyond your means. If you are able to live like a billionaire on borrowed money and then die a peaceful death at 89, how sweet would that be? Meanwhile, getting out of debt also feels wonderful because it is a great sense of accomplishment.

We don't criticize a fella for getting into $100,000 of credit card debt while only earning a $60,000 salary. We praise him for eventually becoming debt free! All those folks who spent within their means in the first place are irrelevant.

Accept People Who Live Beyond Their Means

The personal finance community has opened me up to a world of folks who lived beyond their means and are writing about their debt elimination journeys. I honestly had no idea so many people suffered from debt problems until I started this site.

If I ran out of allowance or side job money when I was in school, I couldn't spend a thing. I didn't have a credit card in college either. By the time I got my first job waking up at 5am every morning to go to work, I was determined to save all I could so I didn't have to work forever!

Maybe it is a good idea if the Government implanted a chip in everyone who has more than $5,000 in revolving consumer debt. Every week the chip would release an anti-dopamine drug to make the consumer so depressed they won't spend any money. Given the indebted want to feel happy again, they'll be so motivated to paying off their debt to get their chips out! Brilliant I say!


Getting into consumer debt is fun. If it wasn't fun, then people wouldn't do it. I discovered the secret to spending more money than normal on vacation is by linking funny money stock market gains to your vacation budget.

It was a breakthrough moment in eradicating my frugal ways during the summer of 2013. It was exhilarating to spend close to $10,000 on experiences. I'm thinking this is the same type of exhilaration people experience who spend money they don't have. It's like getting something for free, but not really.

After the pandemic, we should revenge spend and live it up more!

I don't think people who are up to their eyeballs in credit card debt should feel ashamed. Spending lots of money is like an addictive drug that's hard to kick. Some people are just more susceptible to addiction than others.

The court system shows sympathy for drug addicts all the time (think Lindsay Lohan) by sending them to rehab over and over again instead of jail. We should show the same understanding for those who can't control their spending habits.

Who is the government to say what we can and can't do? Everybody hits a certain limit where they feel so bad about their spending that they eventually stop and go in reverse. Alternatively, the credit card just cuts them off. I say have fun while you still can. We have healthy bailout systems in the form of government assistance, parents, and wealthy spouses. S/he who dies with the most loses.

Wealth Building Recommendations

One of the best way to become financially independent is by signing up with Empower. They are a free online platform which aggregates all your financial accounts in one place so you can see where you can optimize your money.

Before Empower, I had to log into eight different systems to track 25+ difference accounts (brokerage, multiple banks, 401K, etc) to manage my finances on an Excel spreadsheet. Now, I can just log into Empower to see how all my accounts are doing, including my net worth. I can also see how much I’m spending and saving every month through their cash flow tool.

A great feature is their Portfolio Fee Analyzer, which runs your investment portfolio(s) through its software in a click of a button to see what you are paying. I found out I was paying $1,700 a year in portfolio fees I had no idea I was hemorrhaging! There is no better financial tool online that has helped me more to achieve financial freedom. It only takes a minute to sign up.

Finally, they launched their amazing Retirement Planning Calculator that pulls in your real data and runs a Monte Carlo simulation to give you deep insights into your financial future. Personal Capital is free, and less than one minute to sign up. Ever since I started using the tools in 2012, I've been able to maximize my own net worth and see it grow tremendously.

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Consumer debt is wicked. Please pay it off as soon as you can!

49 thoughts on “Should We Still Be Spending Money And Having Fun While Deep In Consumer Debt?”

  1. The assumption here is that most people wallow in the debt and happily and knowingly take it on. That’s not what I’ve seen happen. What I did and what I’ve seen is that is creeps up on you, in part because of naive ideals or just lack of experience. Things happen slowly to many young adults, often over many years, until they hit a crisis. For example you may figure, as a naive twenty plus year old, that a bank wouldn’t give you a loan you couldn’t afford because that would be a bad risk for them and they’re not in the business of taking bad risks. Or when the finance guy at the car dealership looks at your monthly salary and says you can easily afford that car you’d like, you buy into it because they are all nice, decent people and wouldn’t just be stroking your ego to make a sale. Then when you add up your salary at the end of the month and compare that to your bills, guess what? You CAN pay them all.

    So what’s the problem! You are being a responsible adult, paying your bills and debts. Sure, maybe you couldn’t pay off all credit card bill this time, but you paid more than the minimum, and you’ll get it knocked out next month. Sure, sometimes you do the credit card juggle using one card to pay the other, but your tax return is coming soon and that’ll help and generally you’re living fine.

    You have no real worries. You are enjoying your life and retirement is like, forty years or more away. You could be dead way before then so why sweat it.

    But then you need a root canal, and you find your insurance doesn’t cover that, and it’s $2000 when it’s all said and done. Soon after, the newer car is doing fine, but your spouse’s older car needs $1500 in repair work to pass state inspection. And since I mentioned spouse, did I mention you might still be paying off the wedding and honeymoon? After a few years of this you find that…

    yes, you can STILL pay all your bills, you may even be able to save a little because you got some promotions.

    But the debt has risen from a few thousand to maybe a few tens of thousands and while you aren’t really worried, you are having trouble understanding how it got so big. Then you get the first real wake-up call, could be you lose your job or someone is pregnant or you simply were doing the bills and realized how much money you’re spending and it’s more than your parents ever earned in a year.

    That is how I’ve seen it work for most people. Many are living just a bit beyond their means and seemingly living fairly well, but not really saving, not really investing and it isn’t until a crisis of some kind hits that they start to come around. Otherwise they continue to live, paying their bills, saving a little, sliding deeper and deeper into debt, but never really seeking financial independence because they’re managing and in their view, doing just fine.

    1. I can totally see this happening because this is what happens in reverse! When you’re paying yourself first and investing over a long period of time, you wake up one day to realize you’ve got a pretty hefty financial but accumulated.

      Sorry there was such a delay in approving this comment. Been gone this past week. Going to write a post about your thoughts!

  2. This is a great point because this is EXACTLY what many people do! I personally don’t think we should just keep spending money and having fun while deep in consumer debt. Otherwise, will we ever get out of debt? Or will we spent our lives working hard and spending money and forever in debt? I personally don’t want to live like that but isn’t that the norm now?

  3. On one hand, I can understand how you get used to a certain lifestyle, but on the other hand, I just don’t know how you deny the fact that you’re spending more than you’re bringing in. I could see how it might happen to a low income individual with many children, but other than that, it’s a simple math problem that we should all be able to solve.

  4. As a person who was in a lot of consumer debt, I didn’t spend during the 4 years, except for the minor occasion. I do think that people working on getting out of debt should still have fun, there are many ways to do that without spending a lot of money.

    If you are truly eager to get out of debt, then frivolous spending is unnecessary and should be wiped out.

  5. The issue is less with us people than with the government we elect.

    A better solution would be to change the election process – rather than running for an executive or legislative position, you are drafted into it like the Army. Everyone who has an SAT score over 1400 has to serve 2 years in government. The worst person to give power to is the person who wants it. Better to have more Cincinnatus, by forcing people to serve who would rather be doing something better with their time. Once you finish your 2 years in state govt, you’re automatically in the pool for 2 more years in federal government. Then that’s it, you’re out.

    In effect, implementing country wide term limits at all levels, and greatly improving the candidate pool.

  6. SavvyFinancialLatina

    Kinda ironic that the celebrations for people who get out of consumer debt are more publicized than the people who have no CC debt to begin with because they never lived above their means.

    1. The bright side is that some have been able to find jobs at debt consolidation and anti-debt companies after they’ve gotten out of debt. Just like Jared from Subway who makes millions as their pitchman getting huge and losing it all. Always a silver lining!

  7. Man, as much as I love drinking, eating out, and spending money, I believe that you have to earn it. For the longest time, I just took the bus everywhere and ate cans of tuna. I paid of school, invested my money, and now at 25 I can enjoy myself. Everyone should be able to enjoy themselves. You just have to earn it.

      1. Vodka and conversation! You can be broke and get more girls than a rich dude :P

        But I was lucky. I had a girlfriend for a few years when I was in college. Never had to worry about that.

  8. I think it’s hilarious how the business press discretely criticizes the public like this week when most of the nation’s retailers report disappointing financial results. We are criticized for spending too much and going into debt and again, like now, when we pull back. Could it be that many people finally realize they don’t have to go out to eat five evenings a week or perhaps they can get by with five pairs of shoes instead of 20. After the Great Depression many people were permanently traumatized into wise and constrained spending for the rest of the their lives. Hopefully, the Great Recession has had the same effect. Haven’t businesses and especially retailers come to realize that there is a new normal out there?

  9. charles@gettingarichlife

    It’s ironic we don’t celebrate people who stay thin and lean, instead celebrate the overeater who gained 50 lbs and lost 5. Same thing with finance the person who saved and invested is often vilified as being greedy or having too much, while the person who got into $100,000 in debt and paid down $10,000 is celebrated. We don’t reward discipline, instead we shower praise on the people who live it up and then feel guilty about it.
    Like Chris Rock said about people who celebrate getting out of debt, why you celebrating you started at zero!

    1. I think the lesson is to take things to extreme if you want to get noticed or be different. The world is too crowded.

      At the same time, if you have a desire to stay under the shadows, then it’s easy to stay hidden with all the Sentinels around.

  10. Julien @ cashsnail

    Maybe a simple solution would be to lower the amount people are allowed to take on consumer debt & overall debt… Oh wait it’s not feasible it would decrease bank revenue.

  11. Oh! I get it. Sarcasm. Good thing I clicked on the follow up reading link to understand the ending.

    Microchips would be a nice idea. I’m watching Continuum right now, apparently it worked out well for them.

    Oh and maybe Obama did listen to you to some extent. You know there is a government “Nudge Squad” and maybe spending habits is on their lists of behaviors they want to influence.

    Anyway in all seriousness, I think they should make Personal Finance a required class that all high school students MUST pass in order graduate. A large majority of people don’t even have the personal finance knowledge to teach their children, so kids don’t learn it school, and they don’t learn it at home. So where do they learn it from? They don’t learn it at all. And most people wouldn’t even think about learning about it until AFTER they experience financial ruin, or when they realize they on the precipice of experiencing it.

    1. It would be TOO LOGICAL for every high school to teach a one semester or even one month personal finance class. It’s all about reducing teaching budgets anyway to spend more on health care. Oh well.

  12. I had crappy grades and was never motivated in school, but in business I moved up the ladder and make six figures, moved home after college to pay off loans and have saved 20-30% of every paycheck for 18 years. So I’m not a fan of the grading idea, but keep brainstorming as the ideas are fun to read….

  13. Tara @ Streets Ahead Living

    I haven’t been in consumer debt since shortly after college and I paid that $4,000 in credit card debt off by the time I was 23. I do have $40,000 in student loans for a bachelor’s and a master’s degree which many people may think is just as bad as getting into $40,000 of consumer debt. While I consider myself frugal, I still go on an annual vacation and I am having a wedding, of which my fiancee and I have paid $6,000 on which many in the anti-debt community would argue is a terrible idea to do when you’ve still got debt. It probably is just a sense of entitlement but I did really want to have a memorable wedding since I am a big believer in only doing it once.

    I do find it mind boggling for people to buy stuff on easy credit and think they don’t have to pay it off. I worked with a guy who lived a cash-only lifestyle because there were so many liens against his credit that his bank account would be garnished from a history of high credit card debt.

    1. I don’t think $40,000 is student loan debt is anything close to equivalent to $40,000 in consumer loan credit card and auto debt.

      Also, $6,000 for a wedding ain’t bad at all given the average of $25,000+!

  14. I’m not sure the anti-dopamine drug would work so well. When I graduated and didn’t have the life I thought I should I got depressed. And then I started to spend and got myself into credit card debt because the spending made me feel good, although temporarily but I didn’t realize it at the time. Maybe the answer is to make every super happy so they think they have everything they need?

    1. Thanks for your perspective. I think you could be right given there seems to be a propensity to spend (and maybe eat) when we aren’t feeling too happy.

      OK, let’s change it to a happy drug that gets released into the system every day or week by the implanted gov’t chip. Higher dosages for those who have higher consumer debt! A win win. Free drugs!

    2. I don’t personally have a high amount of consumer debt but even I have indulged in a bit of ‘Retail Therapy’….and some people do take that to the extreme. I have to say though that it wasn’t the spending that made me feel good but the shiny, new things I took home with me at the end of the ‘therapy’ session. I think as consumers there’s too much of a focus on possessions which only fuels the spending and, in turn, makes all of the credit card companies deliriously happy.

  15. Debt is like the financial equivalent of obesity. Overeat and you gain weight, overspend and you go into debt. It’s not the specific number of calories or dollars, but the balance that counts. Obviously that’s a simplification, so nobody complain that I’m not taking factor x into account.

    If you have a lot of consumer debt do I think you should continue spending? Of course not. The problem is it’s too profitable for you to continue going into debt and paying 10-30% (or worse) in interest. If it weren’t profitable then the credit companies wouldn’t keep doing it. Ultimately it’s the consumer’s responsibility and no amount of government intervention will cure the problem. It may curb it slightly, but since when have laws been an effective tool against addiction?

      1. Never thought of that analogy before, but I think it pretty well sums it up. So the pimp would be Visa, MasterCard, etc and the prostitute would be the issuing bank?

        1. I think it’s reverse. The credit cards are the prostitutes who you pay for usage, and the banks are the pimps who sell the cards to as many consumers as possible and collect a fee from the card’s fees.

  16. As we live in a consumerism driven economy, it’s hard to get a bearing of what living within your means actually means. We are constantly poked and prodded by promotions of this or that great deal and we are taught by society that we should buy it while we can even if we can’t. Excessive spending hits even the most powerful people because this is the society we become. The truth is, I’ve lived above my means every day of my life until about a month ago. I was making 6 figures and realized I had absolutely nothing to show for it except for a nice car, 3d tv and a leather couch. After that realization, I’ve buckled down and already saved a decent amount. Anyway, thanks for the great post. I’d love to see you stop by and join the conversation at CNA one day!

  17. It’s karma man. What goes around comes around. If you keep spending money while you are in debt, it will catch up to you sooner or later.
    I know how you feel with your wealth destruction. I’m still feeling a bit guilty about quitting my job and I’m not spending much these days. I don’t know how people with debt can go out and spend so much money on luxuries.

    1. B/c if there’s no real pain in getting into debt, then it’s only logical to continue to spend until the credit card companies shut the account down.

      You really feeling a bit guilty about quitting your job? How come?

  18. it’s difficult for some people not to overspend, despite the economic situation. Well, as long as they are not hurting other people, we cannot do anything about it, the bottom line is, it’s their money.

  19. Ironic that my financial advisor and I were talking about this very subject this morning. He told me that I would be shocked at the number of people who are clients he has that make between $500k & $1M (and have for over a decade), still have less than $1M in cash/investments…Jumbo Mortgages & second homes with mortgages as well. These are the same people that pull up to the nice restaurant in a $120k Mercedes & drink the $300 bottle of wine. Gosh, if they croak tomorrow they played the game right. I think the moral of the story is even if people make $1M a year, they will find a way to spend it all…keeping up with the Jones is alive and well! Sometimes I wonder if our economy would even function if everybody was responsible and debt free (other than a responsible level of home mortgage)?

    1. That is an interesting question that I have thought about often. What would happen if nearly everyone in our economy behaved responsibly? I can imagine that it would lower returns on investments because more people would be chasing those returns. On the other hand, it might make entrepreneurship easier because people there would be more capital available for that sort of thing and less for things like consumer debt. Interesting question to ponder, but I don’t have the knowledge of the economy it takes to develop a well thought out theory on what would happen.

      1. It’s better if everybody else other than the people we care about leverage like crazy so that corporate profits go up so we can make a handsome return. We just need to sell before the bubble collapses. Always tough to do!

    2. That would be fantastic data to figure out. In fact, I just finished writing a post on Net Worth To Income Ratios that I think is realistic and something you will find interesting.

  20. It’s only a matter of time before the government does implant a chip in everyone. Except it won’t be to curb our spending – it’ll make us spend more! As a result, there will be a perpetual “strong” economy. The only choice we’ll get is what body part we want the chip installed!

    Oh, and please keep petitioning the Obama administration regarding your proposal. I was summa cum laude in undergrad, so I want my just rewards.

    1. Ha I can totally see that. The government will always have selfish intentions. They’d probably also want to implant chips in us that can read our thoughts. A lot of those far fetched scifi and conspiracy movies don’t seem so far fetched anymore with all the NSA issues that have been in the news. I’d love to get rewarded for good grades too! I worked my bum off for every one.

    2. Man, Summa Cum Laude.. nice! My GPA was 0.07 short of making Summa. Too much partying towards the last year. I crushed golf though!

      I’m thinking everyone should get the chip injected in their right butt cheek. That way, every time you sit down you get a little extra reminder.

  21. EL @

    I think there’s no way to help people who are living above their means because they will not listen to reason. They feel it is the right thing to do in the present, and it will take a major financial setback to get them to adjust the budget. @Chris comment above, yes I have heard some crazy stories of people going bankrupt only to go on a shopping spree the next day after the court has released them of the debt. It boggles my mind.
    P.S. Personally I think the grading system and the chip system you mentioned are bad ideas.

  22. We have some successful friends who make mid six figures. They claimed they were “strongly encouraged” by their realtor to buy a second home when they had not sold their first home yet. They walked away from $400K in mortgage debt on their first home by short selling with their bank because they could not sell it. It pisses us all off as they belong to a country club, buy $5000 purses and travel all over the world- it makes us feel like we’re schmucks for playing by the rules. Your thoughts???

    1. If your state has an anti-deficiency statute that protects borrowers against a personal judgment for any deficiency between the amount owed and the amount the home sales for in a short sale, then one could argue that the bank was well aware of the risk of lending in your state and your friends were just utilizing the consumer protection laws to their advantage. If you are paying for an underwater mortgage, maybe you are a shmuck? I’m playing the devil’s advocate. But it would kill me to make payments on an underwater mortgage and I think the rational strategy would be to do as your friends did.

    2. I felt like a schmuck too as I continued to pay my excessively high vacation property mortgage as folks were walking away. But I reminded myself that the reason for buying my vacation property was to enjoy life there, and that’s what I did. The payments weren’t an issue, so I just sucked it up. The silver lining was when Bank Of America contacted me out of the blue to due a free loan mod from 5.875% down to 4.25%.

      It’s important every homeowner understand their state laws and know which state is a non-recourse state. At the end of the day, it’s a business transaction between the bank and the property owner. If you can navigate within the law, then more power to you.

      These are two pertinent articles:

      How Much Does A Foreclosure Hurt My Credit Score?

      Taking Advantage Of Non-recourse States And Walking Away From Your Mortgage

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