The first time I got a mortgage, the feeling of being in debt occupied my mind and kept me off balance for quite a while. I felt I should cut back on spending as a response to this feeling of financial “emergency.” Eventually, I got used to it, as do others. The trouble comes when you get used to more serious debt problems.
When discussing credit cards, I usually tell people that having a balance on credit cards you can’t pay off each month is a hair-on-fire emergency that should trigger immediate cuts to discretionary spending. No more eating out, movies, or other unnecessary spending until the credit cards are paid off. However, it’s not possible to stay in a panic state for a long time. It’s very easy to get used to being in debt.
Many people who lose their jobs or have some other financial calamities find themselves not only with credit card debt, but also in debt to hydro, the gas company, the phone company, and many other creditors. As they dig themselves out of debt, just owing on credit cards feels like a relief.
It’s harder to persuade most people with credit card debt to cut back on eating out and other discretionary spending if they’ve experienced much worse debt problems in the past. They’ve built up a tolerance to the panic feeling of debt trouble. I’ve met some people whose response to debt trouble is to become more sensitive to even small amounts of debt, but there are more people who become relaxed about debt.
One of the less obvious negatives about going through big debt trouble is that it can leave you relaxed about having smaller debt trouble.