£10,000 Debt

[Megaflow]

Twincam16 said:

Thing is, that describes me. I wouldn't dream of getting into debt to afford anything other than a house, simply because that's what I was brought up with, it makes sense to me and in my family it's normal. It's not like we're massively wealthy or anything, we just only buy stuff we can literally put our hands in our pockets and pay for there and then.

To be frank I'm amazed most people in this country are allowed loans for anything other than property. How on earth someone on a £24k average salary can justify almost as much on a car that'll be worthless in ten years really is beyond me.

That's the problem, they can't. I have finance against my car, but I earn slightly more than the £24k average, have considerably less than that in finance on it, and need it to get to work.

My debts, excluding mortgage, total about £10,960. However should the smelly stuff interface with a fan I have assests of £16,000+ in vehicles to off load.

[With these feet]

As TC said above, apart from our mortgage neither myself or the missus have anything on our cards, no car loans or store cards.
I recently decided to open a workshop and instead of getting a loan to buy stuff I sold my car and used it for the business. I now drive around in either a 14 year old civic or 11 year old van!

I would love to have a new Sprinter etc etc but as long as the equipment Ive got is clean, presentable and does the job then Im happy. Hopefully if the business picks up I will be able to buy slightly newer stuff.

I used to mock my mum and dad when they said "never a lender or a borrower be" - though Im lucky enough to have been in a position to buy our home whereas they missed out buying their council house, which they regret not doing. I can sort of appreciate what they said back then, though it was in the 80's..

Ive had car loans etc and now feel its better to have something older thats paid for rather than new on credit.

Still, £10k is alot of money to borrow unless you have a decent disposable income.

[TTmonkey]

BoRED S2upid said:

TTmonkey said:

Do you own everything you have without any associated debt?

I try and live within my means. £10k each seems high to me and thats an average so there must be a lot with considerably higher than this to counter the lucky few who only have a few thousand or even none!

You forget there are millions of older people (pensioners and the like) that live by the rule that debt is bad, and never borrow, never have, never will. These poeple 'balance out' the many younger 'live for today' people that do borrow heavily.

Some people do not consider a mortgage a debt.

Some people dont consider a car loan a debt - its just a cost associated with life.

Some people dont consider any loan a debt if they are actually able to service that loan. To them, its only a debt if they suddenly cant afford the repayments.

I think rather a lot of people (especially younger people) look at debt this way, and it takes someone sitting down with them and totalling it all up for them to actually see what they are doing. Most people in serious debt dont even have any idea of the total amount they owe.

Additionally, most people taking out a mobile phone contract with a flashy smart phone delivered for 'free' have no idea they have signed up to a really rather significant debt. Its a monthly cost, not a debt, to them. But ask them if they would pay £1200 for an iPhone worth £400 and they would probably laugh at you.

[ewenm]

TTmonkey said:

Do you own everything you have without any associated debt?

No car loans?
No credit cards?
No sttore cards?
No personal loans?

It all adds up rather fast. If you owe nothing, lucky you. I'd say you were the exception to the rule. Even on PH.

What's luck got to do with it?

[vonuber]

I have no debts, not even a mortgage having paid off remainder of student loan 2 years ago in one lump sum. I have only just got a credit card (to pay for Hotels abroad), and have never bought anything on finance.
I am a fairly avg (by normal, not PH, standards) earner.

Although I will say that the mortage is in the g/fs name - I pay her 'rent' so to speak.

[Twincam16]

Eric Mc said:

Count me as a lucky one too then.

Or is it good financial management and realistic expectations rather than luck?

I thought it was, and I remember mentioning this on a thread on here at the height of Brown's false boom, only to be torn to shreds by a bunch of City types telling me that debt made the world go round, I would always want more, and that I'd never be happy in an average house with a second-hand car regardless of what I actually said.

I'm still happy. They helped to screw the economy. Tell me who's right there.

[TankRS]

TTmonkey said:

No car loans?
No credit cards?
No sttore cards?
No personal loans?

Nope
No - well in a days time
Nope never had
All paid off last year

TTmonkey said:

It all adds up rather fast. If you owe nothing, lucky you. I'd say you were the exception to the rule. Even on PH.

This will be me after this months paycheck clears in the bank! £100 left on a credit card and i am, besides mortgage wich i'm led to believe is exempt from this debt topic, debt free since i was 18, im now almost 30.

I wont sugar coat it, its a fking amazing feeling!
I'm hoping to stay debt free for a few years at least as the money i'm currently saving for my wedding next year, and the spare from paying the Credit Card will all go into a car fund.

[iphonedyou]

TTmonkey said:

Additionally, most people taking out a mobile phone contract with a flashy smart phone delivered for 'free' have no idea they have signed up to a really rather significant debt. Its a monthly cost, not a debt, to them. But ask them if they would pay £1200 for an iPhone worth £400 and they would probably laugh at you.

That's not a particularly good example, though, as that £1200 will include telephone service, in addition to handset subsidisation. And the telephone service can't be free.

[wolves_wanderer]

HurryUpAndWait said:

Hugo a Gogo said:

average student debt is 20k in Britain

I wouldn't class this in the same league as other types of debt - hugely generous terms. Like if your income drops below a certain level, you don't need to make any repayments.

Practically the same for any unsecured debt as bankruptcy is so easy and consequence-free, especially the younger you are.

I don't think that loading people with debt at an early age is ideal. No matter how generous the terms it makes it normal to be carrying large debts IMO.

[Miguel Alvarez]

TTmonkey said:

Some people dont consider any loan a debt if they are actually able to service that loan. To them, its only a debt if they suddenly cant afford the repayments.

I'll admit I kind of think like that. I wanted something in the past and no amount of haggling would reduce the price down despite having the cash there and then. I took out the 0% finance and stuck the rest in an ISA. My own personal rule is never get myself into anything I can't get myself out of quickly mortgage aside.

[turbobloke]

From a CreditAction debt stats report for January 2012, so nearly six months old now.

Average household debt in the UK (excluding mortgages) was £7,975 in
January. This is up from a revised £7,951 in December.

Average household debt in the UK (including mortgages) was £55,988 in
January. This is up from a revised £55,843 in December.

Average consumer borrowing (including credit cards, motor and retail finance
deals, overdrafts and unsecured loans) per UK adult was £4,221 in January.

The estimated average outstanding mortgage for the 11.2m households that
carry mortgage debt stood at £111,260 in January.

UK households are paying an average of £2,432 in annual interest repayments.

[Twincam16]

wolves_wanderer said:

Practically the same for any unsecured debt as bankruptcy is so easy and consequence-free, especially the younger you are.

I don't think that loading people with debt at an early age is ideal. No matter how generous the terms it makes it normal to be carrying large debts IMO.

How on earth is bankruptcy consequence-free?

[AyBee]

Hugo a Gogo said:

average student debt is 20k in Britain

4 years in uni has done that to me. Wierdly I don't really see it as debt though (even though I know it is), it just disappears from my pay packet each month - I could pay it off if I wanted to, I just prefer having the money for other things.

[TTmonkey]

ewenm said:

TTmonkey said:

Do you own everything you have without any associated debt?

No car loans?
No credit cards?
No sttore cards?
No personal loans?

It all adds up rather fast. If you owe nothing, lucky you. I'd say you were the exception to the rule. Even on PH.

What's luck got to do with it?

I don't understand your coment. Are you speaking for BoRED S2upid, or correcting my turn of phrase, or just making a pointless point? I wasn't really telling BoRED S2upid that his finacial situation was down to random happy coincidence, I was just saying that living without debt is a nice position to be in.

Either way it was said to him, not you.

[Godalmighty83]

Asides from a mortgage iam completely debt free but I know some who have been complete idiots with money and have ended up with total debts several times their income through pure mismanagement.

[wolves_wanderer]

Twincam16 said:

wolves_wanderer said:

Practically the same for any unsecured debt as bankruptcy is so easy and consequence-free, especially the younger you are.

I don't think that loading people with debt at an early age is ideal. No matter how generous the terms it makes it normal to be carrying large debts IMO.

How on earth is bankruptcy consequence-free?

I meant to say relatively. I know 2 people who have gone bankrupt from spending on crap, neither had a house or anything significant to lose and both were borrowing again after they were discharged.

[Ranger 6]

doogz said:

I'm another one of these smarmy gits that has no debt outside my mortgage...

Smarmy git here too

Credit Cards are used for food, fuel etc and paid off monthly.

[Willy Nilly]

No mortgage (don't own my home, but my rent is err, cheap), no car loans, no personal loans, no fancy holidays. I like giving the impression of poverty.

[Eric Mc]

The trouble with forum comments is that people can't always tell if a comment is a general comment or directed at a previous poster specifically.

Most of us who are now debt free (I don't even have a mortgage now) have ended up that way mainly through being careful rather than pure luck - although luck (both good and bad) can play a part in a person's financial affairs.

Where I will definitely have "bad" luck is in my pension planning. My pension is gointg to be so seriously rubbish that I am really quite concerned where I will be in ten years time. And this is DESPITE the fact that I have no debts to service and am currently saving at a rate I was never able tio achieve earlier in my life.

[ewenm]

TTmonkey said:

I don't understand your coment. Are you speaking for BoRED S2upid, or correcting my turn of phrase, or just making a pointless point? I wasn't really telling BoRED S2upid that his finacial situation was down to random happy coincidence, I was just saying that living without debt is a nice position to be in.

Either way it was said to him, not you.

No need to get upset, it's a forum, not a private conversation.

Living debt-free is a great position to be living in, but in my experience someone's level of debt has very little to do with luck and far more to do with choices made. I was asking if you really meant "lucky" or actually meant something else. From the above it appears you did mean something else, so I'm glad you've clarified that.