Don't Brag About Being Debt Free

Facebook is a huge inspiration for a lot of my posts. After all, where else can you catch up on the latest gossip, check the news and simultaneously discover that 2/3 of your friends are annoying a-holes?

Today's post is courtesy of a mama that tends to brag a little too much and a little too loudly to be entirely believable. Her posts always have a fakely cheerful tone to them that borders on condescending.

Today's post: So glad I've made good choices in regards to credit cards, bills and spending that have allowed me to be debt free.

The post was followed by numerous people congratulating her.

I on the other hand refrained from commenting. Why? Not because I'm jealous that she's debt free (Disclaimer: I am in no way, shape or form debt free and I won't be for the rest of my life. Thanks college bills, medical bills, husband's debt, etc...) I was irritated by her post because it isn't true.

She may not be debt free - but she owes society a ton.

You see, her utopia is funded on the back of numerous social programs. She is a photographer that deals only in cash. Her husband is also a business owner... that deals only in cash. She has posted vague comments before regarding her reason for that and they almost sound like she's alluding to tax fraud sometimes. After all, it's hard for the government to track a cash-only business. You pretty much have to rely on the honor system.

On top of that, they apply for - and get - every social program under the sun. From health care to preschool and even camp for her older kids, everything is paid for. Her kids - all 3 of them - don't cost her a dime. They also make her family eligible for a number of other social welfare safety nets. They're careful to fly below the radar. They rent a house rather than buy one and avoid purchases that would raise red flags - like newer cars that would require a car payment. New clothes are never an issue. On top of all that, they go on vacation all the time and Christmas at their house is second to none.

On the other hand, I'm sitting here trying to skim down the grocery budget to free up money to pay off debt. I drive a 10-year old car and haven't bought new clothes for myself in years. My kids don't go to camp - I can't afford it - and we've sacrificed as a family to put my oldest in preschool, but since we pay for it, there is no bus and I have to drive her myself. Because my husband's income is reported through a W-2, we don't qualify for any social programs. None. No discounts on preschool tuition or anything like that. We buy our healthcare to the tune of nearly $1000 per month and that's the one offered through my husband's job. Purchasing it outright through the state's exchange would double the cost for a similar plan and no, it's hardly great. Before universal healthcare, our coverages were much better and the costs were much lower. Next year, when my oldest is in kindergarten, she'll go for free, but I'll have to pay for the school bus or drive her myself. Lunch will be another expense, and kids are asked to not bring their own because of allergies. The last time I went on a vacation was for my honeymoon, 6.5 years ago.

It would be nice if we could keep our money.

One thing that would really help our solidly middle-class family stay afloat is if we could keep our money. I know what you're thinking - I haven't mentioned my own job. I'm a stay at home mom. Daycare cost more than I would bring in, so I decided to stay home. I know that there will be time to work when the kids are older and in school. I know I won't make as much later on because of my choice to stay home now, but I made that sacrifice in order to have a family. Material possessions are meaningless if you don't have anyone to enjoy them with.

Take this as an example... the photographer friend I mentioned above? Lets figure out what she REALLY makes.

She says they make $30k/year, so we'll use that as the base point.

Salary: $30k
Free medical: $12k (this is what we pay through an employer-sponsored plan... hers doesn't have co-pays, so I'd say the value is a little higher, but we'll leave it alone.)
Free 5-day pre-k: $5k
Free bus ride: $200
Food stamps: $3k (I have no idea what people get for food stamps.)
Free Summer camp for 3 kids: $2k (again, I have no idea what her camp would cost, this was just an estimate)
Total: $52,200

Now lets compare to an average family that doesn't get any assistance.

Salary: $70k
Medical: -$12k
5-day pre-k: -$5k
Bus: -$200
Total: $52,800

Pretty similar, right? Except the family that doesn't get assistance still has to pay for food, summer camp for their kids and co-pays at the doctor. The family that doesn't get help will also pay more in taxes. In a lot of areas, getting assistance means you can't own a home. That means the family getting help also avoids paying real estate tax while the family without help probably does own a home and is paying real estate tax, trash removal, etc. The family getting help may pay those fees through their rent, though they may also be getting housing assistance, which would negate that.

Add in that the $30k is only what is REPORTED by the self-employed photographer family and you can see how easy it would be for someone like that to be debt-free while the rest of us struggle to make ends meet and often have to add to our debt to get by.

So the next time you want to brag about being debt free - make sure you're not relying on social programs to live that type of life. You're never debt free if you owe your way of life to social programs funded by taxes from families that are adding to their debt burden to make ends meet.