Discussion
Petrified of it. I have a mortgage because the rational part of me accepts that unless I want to live in a dustbin for the rest of my life, then I need to hock myself to the bank. But when it comes to personal debt I run for the hills. In fact I'm so pathalogical about it, and so committed to remaining debt free as far as credit cards, loans and finance deals are concerned that I'm probably in danger of losing a degree of perspective on matters. Paying for everything with cash does impose certain restrictions on what you can do in life.
What about others of you? Those of you with significant sums outstanding who are quite comfortable with it - how do you not wake up at night in a cold sweat? How on earth do you function in a relaxed manner? And I'm not suggesting you shouldn't. I'd just like to know how you do it.
What about others of you? Those of you with significant sums outstanding who are quite comfortable with it - how do you not wake up at night in a cold sweat? How on earth do you function in a relaxed manner? And I'm not suggesting you shouldn't. I'd just like to know how you do it.
I won't take on any debt although I had my fair share in the past. My modest house is paid off, I occasionally get tempted to move somewhere bigger and start a new mortgage but i'd have to spend so much more to get something significantly better I don't think I'll bother. Car paid with cash. No phone contract.
No credit cards. I save for holidays which doesn't take too long as nearly all my income is disposable.
What do I miss out on? I drive a C55 amg instead of a C63 amg and have on street parking instead of a garage (which admittedly I would really like). Worth it for me but I can see the appeal of credit especially to younger people, not 43 year old dinos like me.
No credit cards. I save for holidays which doesn't take too long as nearly all my income is disposable.
What do I miss out on? I drive a C55 amg instead of a C63 amg and have on street parking instead of a garage (which admittedly I would really like). Worth it for me but I can see the appeal of credit especially to younger people, not 43 year old dinos like me.
The only debt I have is the mortgage. You can't save up for a house.
I use charge cards that I pay off in full every month.I even buy my phones outright and do SIM only contracts. (Used to be PAYG but that got to be a PITA)
I got burnt with debt as a young man and it made me very, very wary of overextending myself. For this reason
Most of my life, though, I have had a very risky employment position with the possibility of extended periods of no earnings in between periods of (very) decent income. So no-one would lend me money anyway!
So I maintain quite a high level of liquid capital at all times to cope.
Probably not as necessary now I am in regular employment - although I could go back to being self-employed very quickly...
I use charge cards that I pay off in full every month.I even buy my phones outright and do SIM only contracts. (Used to be PAYG but that got to be a PITA)
I got burnt with debt as a young man and it made me very, very wary of overextending myself. For this reason
Most of my life, though, I have had a very risky employment position with the possibility of extended periods of no earnings in between periods of (very) decent income. So no-one would lend me money anyway!
So I maintain quite a high level of liquid capital at all times to cope.Probably not as necessary now I am in regular employment - although I could go back to being self-employed very quickly...
Ten years ago this week I lost a job overnight that paid me £120,000 pa net of tax.
I had a £500,000 mortgage, several cars (two on finance), exotic holidays, several £1000 suits, etc and a wife and baby on the way.
A year later the lot were gone and I had debts of £270,000. Somehow I managed to avoid bankruptcy and have been rebuilding my life ever since. I still owe some of it.
However, since that day I have not taken on any new credit. I maintain a single credit card and that gets paid off each month. I rent my home. I own my own business now and have never taken on a penny credit for that either. Cars are purchased outright.
You can live without credit and I take comfort that should it ever happen again all I would really have to worry about would be basic living costs. I only earn a fraction of what I did ten years ago, I don't pay 40% income tax, but life is simple and without pressure or worry.
So OP, I'm with you 100%. The high life is all well and good but it has to be paid for at some point.
Living within your means today will likely mean you can do so tomorrow...
I had a £500,000 mortgage, several cars (two on finance), exotic holidays, several £1000 suits, etc and a wife and baby on the way.
A year later the lot were gone and I had debts of £270,000. Somehow I managed to avoid bankruptcy and have been rebuilding my life ever since. I still owe some of it.
However, since that day I have not taken on any new credit. I maintain a single credit card and that gets paid off each month. I rent my home. I own my own business now and have never taken on a penny credit for that either. Cars are purchased outright.
You can live without credit and I take comfort that should it ever happen again all I would really have to worry about would be basic living costs. I only earn a fraction of what I did ten years ago, I don't pay 40% income tax, but life is simple and without pressure or worry.
So OP, I'm with you 100%. The high life is all well and good but it has to be paid for at some point.
Living within your means today will likely mean you can do so tomorrow...
Rawwr said:
Absolutely everything I buy goes on my credit card. Bills, petrol, food, sundries and more significant purchases. I haven't used my debit card for years and it's highly unusual for me to carry cash.
I don't understand why everyone doesn't do this.
Almost everything I buy goes on my charge cards for the reasons you state - I get points/incentives etc. If you pay the card off every month it's not really "debt" is it? Leaving a balance on the card and needing to pay interest is debt...now that's the part I don't understand doing!I don't understand why everyone doesn't do this.
Don said:
Almost everything I buy goes on my charge cards for the reasons you state - I get points/incentives etc. If you pay the card off every month it's not really "debt" is it? Leaving a balance on the card and needing to pay interest is debt...now that's the part I don't understand doing!
Quite. It's the people who state they'll never have a credit card or any kind of contract which are possibly quite foolish. I suspect it's 50% idiocy and 50% typical PH nonsense.I have a credit card and it has about £1000 on it. Im about to pay it off in one go as monthly wages permit this but it makes me feel funny knowing I owe £1k to someone. To me that's a fair wedge of money as Im in my 20's.
Cars - I lease my current one. For me its disposable income and its f
k all so have plenty left over to save. Previously I PCP'd. the 3 before that were bought outright. Doesnt bother me one way or another in fact I prefer knowing Ill never own the thing as I care less about it.
Cars - I lease my current one. For me its disposable income and its f
k all so have plenty left over to save. Previously I PCP'd. the 3 before that were bought outright. Doesnt bother me one way or another in fact I prefer knowing Ill never own the thing as I care less about it.MikeGoodwin said:
I have a credit card and it has about £1000 on it. Im about to pay it off in one go as monthly wages permit this but it makes me feel funny knowing I owe £1k to someone. To me that's a fair wedge of money as Im in my 20's.
Cars - I lease my current one. For me its disposable income and its fk all so have plenty left over to save. Previously I PCP'd. the 3 before that were bought outright. Doesnt bother me one way or another in fact I prefer knowing Ill never own the thing as I care less about it.
Nothing wrong with renting. Especially if you don't intend to keep something forever. The key thing is that the term of the deal is predictable and manageable even if your circumstances change.Cars - I lease my current one. For me its disposable income and its f
k all so have plenty left over to save. Previously I PCP'd. the 3 before that were bought outright. Doesnt bother me one way or another in fact I prefer knowing Ill never own the thing as I care less about it.As they say: If it flies, floats or f
ks - consider renting! 
OP, sounds like you've got your head screwed on the right way, yes a mortgage is a pain, but eventually the pain will go and you will be left living cheaply.
For now avoid loans and running up credit card bills, live within your means - ignore the Jones' with their contract hire car (er should i say rented car?), ignore those on swanky holidays, all that will remain of those will be fading memories and a few digital photo's on a memory card.
I don't mean live like a hermit or a monk, just don't go daft and overspend.
I say all the above from experience of not doing that. Only now many many years later am i debt free, i don't have brand new cars, we don't go on expensive holidays, but we are happy knowing we have a bit set aside and can basically do what we want, if i had my time again I would follow my own "preaching" . Happiness is being content, not getting at all costs what others have!
For now avoid loans and running up credit card bills, live within your means - ignore the Jones' with their contract hire car (er should i say rented car?), ignore those on swanky holidays, all that will remain of those will be fading memories and a few digital photo's on a memory card.
I don't mean live like a hermit or a monk, just don't go daft and overspend.
I say all the above from experience of not doing that. Only now many many years later am i debt free, i don't have brand new cars, we don't go on expensive holidays, but we are happy knowing we have a bit set aside and can basically do what we want, if i had my time again I would follow my own "preaching" . Happiness is being content, not getting at all costs what others have!
I have a mortgage which is small, though I'm considering tripling it to get a nice house.
I have an interest free Tesco CC its at the max now but it means all my money I haven't spent goes off my mortgage interest which works out at 8% to a 40% tax payer. It will be paid off at the end of the rate offer.
I have a new car on lease
I get so many Tesco points we don't have to pay for meals out / days out / cinema etc. we also saved a shed load when the fuel offer was on.
In short I'm managing my debt more effectively and as a concequence I've never been so well off, which is why we now have the confidence to go for a bigger mortgage and by our dream house.
You do have to be very disciplined mind in order to not let it run away.
I have an interest free Tesco CC its at the max now but it means all my money I haven't spent goes off my mortgage interest which works out at 8% to a 40% tax payer. It will be paid off at the end of the rate offer.
I have a new car on lease
I get so many Tesco points we don't have to pay for meals out / days out / cinema etc. we also saved a shed load when the fuel offer was on.
In short I'm managing my debt more effectively and as a concequence I've never been so well off, which is why we now have the confidence to go for a bigger mortgage and by our dream house.
You do have to be very disciplined mind in order to not let it run away.
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