Dealing with debt can be more than a financial burden. For those struggling with it, debt can be a source of stress and shame that can even be tied to beliefs about who they are.
Depending on how you see debt and your ability to pay off debt, you may think how much you owe is proof that you’re bad with money. Or you might view debt as a pretty typical money problem that nearly everyone faces.
These judgments of debt don’t just come from within, though — debt also affects how others view you, finds a new FinanceBuzz survey. We asked people how they really view borrowers with debt in a survey of online respondents. Here’s what we found.
- Debt is a moral issue, say four out of five people who agree that failing to repay debt is wrong.
- 30% of people say they’d have a worse view of a person after learning that person had a lot of debt. Men are more likely than women to negatively judge others for having debt, at 32.6% to 28.5%.
- People commonly assume borrowers with large debts are living paycheck to paycheck (28.0%), have bad spending habits (27.5%), or are bad with money (23%). The most common assumption made about borrowers, however, is that “they’re struggling, but making it work” (32.5%).
- 33.5% of respondents say spending habits are most likely to affect their opinions of others. This was followed by debt at 17.0%.
- Overspending is also the most common reason for negative money judgments, with 40.2% of responses.
- People are also likely to think less of others who are too cheap (17.8%) or for missing debt or bill payments (14.0%).
80% of people think debt is a moral issue
When it comes to people’s true feelings on debt, one thing is surprisingly clear: people tend to see debt as a moral issue. That is, repaying debt is a matter of right or wrong, and our survey finds that in most people’s minds, it’s wrong to not repay debt.
Four out of five respondents (80.2%) agree borrowers should repay debts and failing to do so is wrong or immoral (34.5% “strongly agree” with this belief). Just 5.3% disagree with this statement.
Not surprisingly, people who say they have a lot of debt are less likely to agree with this stance (71.8%) and don’t agree as strongly. People with no debt, in contrast, are more likely to strongly agree with the belief that failing to repay debt is immoral (39.8%).
Debt gets you judged — most often by men
Debt can affect how you’re seen by others, our survey finds. In fact, three in 10 (30.3%) respondents say their view of an acquaintance would change for the worse if they knew this person had a lot of debt.
Men are more likely to negatively judge others for having a lot of debt (32.6%), compared to women’s views on the matter (28.5%).
Next, we asked which assumptions respondents made about people with debt, with the ability to select multiple responses.
People most commonly assume that borrowers with a lot of debt “are struggling a little, but making it work” (32.5%). They also often assume borrowers with a heavy debt load are living paycheck to paycheck (28%).
While these are somewhat neutral stances, more negative beliefs are also common, such as people with high debt “have poor spending habits” (27.5%) and “are bad with money” (23%).
Men are more likely than women to assume that people with debt are bad with money (25.19%) and have bad credit (18.9%).
Women, however, have more neutral assumptions about people with debt. They are slightly more likely than men to think borrowers are struggling a little but making it work (34.9%), have bad luck (10.3%), or have their debt under control (4.9%).
How harshly people judge others’ debts also depends on the types of debt they hold. Respondents see some as “good debt,” such as mortgages or student loans which they view more positively, our survey finds.
Payday loans, on the other hand, are largely agreed to be “bad debt.” Respondents are more likely to take a negative view of people who have payday loans (33.7%), along with tax debt (27.8%) or credit card debt (23.3%).
Americans are twice as likely to judge others for overspending as they are for having debt
While having debt might draw some hefty negative judgments, how do these compare to people’s views on other areas of money management? Our survey found that having debt actually isn’t the most-judged financial behavior. That honor goes to poor spending habits.
In general, people say that their opinion of a person is most likely to be affected — positively or negatively — by others’ spending habits (33.5%). In fact, they’re twice as likely to judge others for overspending than for carrying debt (17.0%).
Men and women also diverge on personal finance behaviors that are likely to affect their views of others. Men are more likely than women to view people differently based on their incomes (10.4%), net worth (9.6%), and investments (6.3%). Women’s views of others are impacted more by spending habits (35.5%) and debt (17.6%).
We also asked about specific money behaviors for which respondents were most likely to negatively judge others. Overspending is by far the money behavior (40.2%) for which respondents would judge others most harshly.
Being cheap is judged twice as much as having debt
Other behaviors that raise some eyebrows? Being too cheap (17.8%) and missing debt or bill payments (14.0%). Just 9.5% say they’d be most likely to negatively judge someone for having a lot of debt.
Respondents who say they have a lot of debt are half as likely to negatively judge someone else for having a lot of debt or bad credit. They were more likely, however, to negatively judge someone for being cheap.
Women are also more likely than men to negatively judge others for being cheap (19.1%). In contrast, men were more likely to have negative views toward people with a lot of debt (10.4%) or bad credit (7.0%).
People are surprisingly willing to discuss debt
Despite the persistent social taboos around discussing personal finances and debt repayment strategies, respondents are fairly open to discussing debt with someone they know. Only 17.2% say they would change the subject, while many more say they would ask questions and offer advice (29.3%) or at least listen politely (20.8%).
FinanceBuzz ran this survey through Pollfish, collecting 600 online responses from U.S. adults on April 19, 2019.