This thing about paying off a mortgage aged x, y or z though – is this a good marker?

we’re in different circumstances and so have different priorities – no kids so our 3 bed semi is big enough for the 2 of us and not having to try to plan for someone else’s future. And yes we spend on holidays because that’s part of our balance of quality of life (my car was built and registered in the last millennia 😉

I remember how house prices boomed and then crashed in the 90s. I guess most on here aren’t aware of it. The head of the Bank of England spoke publicly afterwards, to the effect that the B o E would not allow any similar event to occur in the future.

They didn’t stop the Northern Rock & Halifax race to the bottom though.

I wonder if the B of E are carefully watching consumer debt.

I wonder how many households have zero debt. Cant be many these days. – just a credit card that pays off every month, up to £100 normally.

I wonder how many households have zero debt. Cant be many these days

if you consider the number of households headed by pensioners, or those about to become pensioners, I suspect the number is quite high. Remember the total amount of money owed in the world is the same amount as the total amount lent (the numbers are probably skewed in the UK due to the trade deficit over recent years).

if you plan on leaving that big house to your kids or their kids, i hope you’ve got some way of paying for your care in later life….

When I talk to younger colleagues who I know earn less, low interest rates plus a sense of entitlement combine to make them see, want, buy with little thought beyond that.

Apparently I’m just being old and out of date for having no debt other than mortgage. But they seem to equate happiness with stuff, so I guess that’s just the way things are for many people now.

I heard this figure this morning and was rather surprised – what are people using/wearing out that they haven’t finished ( started ? ) paying for ?

In 2013 over 70% of new cars were on PCP. So cars for sure.

Anecdotally, I’ve heard of people buying bikes, holidays, cars and clothes on credit. I’ve even been there myself.

Most people I know seem to think of debt on credit cards they’re NOT paying off as part of day to day life.

Less about appearances and more about entitlement. A subtle distinction but one worth making I think.

I know it’s one of the words du jour, but I do think you have something there finbar – effectively it’s moved from individual envy of the apparently successful neighbours to something more like an invisible burden.

When I talk to younger colleagues who I know earn less, low interest rates plus a sense of entitlement combine to make them see, want, buy with little thought beyond that.

And you have that pervasive pressure combined with amazing ease of fulfillment – 2 mins on your iPhone and that latest shiny object will be in your hands within a day, and increasingly faster than that.

Hmm. Humans are good at sleep walking into bad situations. Feels like we’re doing it again, but this time giving our kids a greater addiction to consumerism than ever before….

I’d imagine I owe at least that…90% of which is on Student Loans.

If you want your kids to be financially secure you’d do better investing in their education than the house.

If you want your kids to be financially secure you’d do better investing in their education than the house.

If the house is in the right catchment area, he is!

I think it’s a bit unfair to call out the younger generation for their sense of entitlement. Sure we were all exposed to advertising and marketing in our youth, but these days it goes way beyond that. When companies are bringing in psychologists to target individuals and exploit peoples emotions and deep rooted insecurities what chance have they got? I’d bet my life on it that the generation(s) before would have fell for the same traps if they existed and be in the same position.

Since I switched bank accounts 3 months ago I’ve built up about 2k of CC debt. But it’s at 0% and I’ve balanced that with savings that are paying 5% for that period. My theory is I can earn the interest, wait until the interest free period is up and then bounce the debt for around 1% and continue if savings rates are better, or just pay it off. I am normally rubbish with money so there’s probably a massive flaw to my plan!

Ironic user name then? ^^^

i ll be forever grateful to mrs tts she put me on the straight and narrow 16 years ago.. if you aint got the money dont splash the cash she said.. i d previously been 30k in on credit cards etc but havent owed anybody a penny for tha last 10 years or so.. lifes cheap when you live like this.. we are the only folks mortgage free on our street and also the only house without an audi/ merc/ range rover.. next door are currently spending 80k on an extension all borrowed money all top spec stuff.. etc. i ve just come in after spending all day digging the footings for our extension.. total spend so far £135.20. neighbours builder spent 3400 on his piling.. having exactly the same done by the same firm.. 2250. if you must spend spend as little as you have to.

By “Keeping up with the Jones’s” I mean buying goods for the sake of buying them to maintain appearances. It doesn’t matter if it’s via a straight cash purchase or on credit. I buy stuff I need rather than attempting to build a facade or just because X has it.

I don’t think anyone uses this rationale anymore. It’s more “Mr Jones has a white Audi A6 with black wheels, therefore I deserve one too”.

Less about appearances and more about entitlement. A subtle distinction but one worth making I think.

I don’t know anyone who uses either rationale – most people don’t give a **** either way, appearance or entitlement – I think it’s a classic reverse snobbery effect to think either of those rationale still exist.

I couldn’t care less about why or how other people spend their money and I don’t know anyone who do.

Over the past 10 years or so being mortgage free has been a very poor financial approach considering :

– how low mortgage rates have been
– how low interest rates have been on cash
– how high BTL yields have been
– how high CG have been

A massive opportunity cost for the warm feeling of being “debt free” when in effect for very little work and risk the return has been superb. It’d take a serious crash to wipe that out.

I learned many years ago no one ever tells you the whole story

Bob might have the big fast Audi with the black wheels. Maybe it’s on credit maybe he earns more than you think. Perhaps his mum told him to spend his inheritance on fun.

Be happy with your lot and live your life not someone elses.

Now while that might sound very cliche’d there’s a quite alot of truth behind it.

I learnt it when I was very young and didn’t understand why my mates Lego collection was so vast.

Turned out his parents were divorced and his dad used to treat him with Lego.

Once I figured that out I realised there were usually other reasons for why some people appear better off than others. The grass isn’t always greener.

Interesting comment from an economist on the radio this morning – central bankers now worried that with rates so low it’s causing consumer debt to grow (which I know is kinda the reason rates are lowered) – storing up problems for the future. People aren’t saving because rates are crap – and also not batting an eyelid at loading up the mortgages / unsecured loans.

So we’ll be heading for another financial meltdown soon 😯

Its the consumerism based lifestyle that feeds it. Probably with Tory backing. Let the poor people build up large amounts of debt so they have little or no choice but to work longer or harder to service that debt.
Dial in very effective advertising and marketing so the other half just has to have the latest phone, laptop, car, sofa, table, kitchen and bathroom . All of sudden there is £300 a week on direct debit , all for things which hugely devalue as soon as you take possesion of them.

Then you have to include the fact the DFS sofa you bought on 5 years debt is made out of monkey metal and bamboo , stuffed with wood chippings and will be both out of fashion and knackered after 3 years so its time for a new one. still paying for the last one.

Living costs go up very slowly and wages ofen dont.

Im debt free , and saving 4 figures a month , probably be better off long term with mtg debt as mentioned above . But if all goes tits up I walk with enough to live on for a good few years , possibly retirement if I could stand a third world country. No wife or kids to finance.

I hope you have diversified the currencies your money is invested in singletrackmind. Jamba says the pound is fine but the Euro is about to crash. You know what I think.

@nickfrog – my mortgage was always very low LTV so the risk to me on defaulting was higher than someone with a 90% mortgage where the lender is shouldering much of it.

Mortgage paid and no debt, it’s a good feeling. When I got made redundant there was much less worry than the others who’ve got mortgages, cars on credit loans etc to worry about paying each month.

Shiny things are nice, but so is sleeping well at night.

zanelad – Member

Mortgage paid and no debt, it’s a good feeling. When I got made redundant there was much less worry than the others who’ve got mortgages, cars on credit loans etc to worry about paying each month.

Shiny things are nice, but so is sleeping well at night.

That’s my take on it as well, + It should allow me to take a lower paid but less stressful job in a few years.

I have never saved always worked hard but spent what I had, never really been in debt, apart from going overdrawn sometimes.
Never thought I would ever own my own house.
But a very dear friend passed away and left me his.
I am very grateful for his gift but his passing has left me suffering anxiety and deppression so I don’t feel as happy I suppose I should be being mortgage free and debt free.

Been called into work this week for one of those restructuring meetings, expecting redundancy or an offer that will make me want to ask for redundancy

Just finished paying off the mortgage, have £900 in debt that I think I’ll pay off tomorrow

Takes so much stress out of the situation, rather than worrying about getting another job for the money, I’m thinking of re training and going in a different direction I’ve thought about for a long time. In fact I hope they do let me go

To me debt is a form of slavery, as a US economist put it “we need to keep people graying in the harness ” marketing sells us what we don’t need and credit keeps us on the treadmill

13k?

Woohoo! I’m finally above average with something! 😀

If the house is in the right catchment area, he is!

We are – deliberately so for primary and secondary;-)

We have a credit card that probably gets to £1.5-2K every month before it automatically pays itself off never paying a penny of interest. Is my offering adding to the debt mountain? I never feel of it as debt as the money is sat in the bank before payday – it’s just more convenient and more secure to use the credit card for everything. Also for the purposes of this exercise if one family had a debt of £20K and another had savings of £20K would the average of the two family’s debt be zero or £10K?

With student loans and pcp both so common I’m amazed it’s so low.

MOAB (I think) posted the global salary thing.

Even the UK one is sobering.

https://www.ifs.org.uk/wheredoyoufitin/

The growth of consumer debt does seem to be an issue for many societies, if only because it is increasingly being used to finance things that arguably aren’t assets. (Nice bike on “0%” anyone?).

The best financial education I had was typing thousands of letters at a big Citizens Advice Bureau as a student / part time job from 2001-3. Even then, it was clear to me that easy access to debt can come with a sting in the tail. I was later a trustee there for 6 years, so have stayed in touch with the growth and changing forms of consumer debt.

That doesn’t mean that I’ve not used it, but I think I see debt for what it is: a service to me, but also an instrument to make money for someone else. Without education, support and sometimes self discipline, I’ve seen it be a big headache. It’s also inflating complete bike prices in higher priced segments IMO.

The people I have seen become and stay financially stable understand compounding (of interest and growth of assets). They make the compounding that makes the lender so much money over time work for them instead.

The Mr Money Mustache blog (please, do Google it!) explains much of what I’m getting at more clearly than I can. You can take or leave the early retirement and financial independence bits, but the analysis is a sound read.

If interest rates stay low for longer, then there will continue to be a view that paying debt off isn’t worth it. But it’s worth doing the sums on paying off debt and then investing afterwards – there are no right answers, but a need for a lot more critical thinking IMO.

It should allow me to take a lower paid but less stressful job in a few years.

Me too, I’ve taken a job where I’m only working four days a week. Can’t wait to start in all honesty.

Mind you, looking at the lists Mrs Z is preparing of jobs to do around the house, I may regret ithat. Still as long as she’s not spending the redundancy package, I’m happy.

Us. 2 Mortgages excluded and the 3 quid I nicked from the wife purse to pay my TT entry tonight but that’s a secret. Not that hard. Wife a social worker but I’m only a supply teacher. Don’t buy anything on a CC.

Thankfully in my earlier life I did well in my 1st career path so no mortgage to pay. 2nd career doing something that doesn’t pay brilliant but I love to do.
Mrs L has always been in nursing so combined income isn’t great now but we were both brought up by parents who instilled “if you haven’t got the money to buy outright, save up”. I’m grateful that means no debt now.
We are by no means we’ll off but we do get Whistler and the Alps every year and are prepared to be semi-skint so we have wonderful family experiences in life and nice bikes.
Only use C/Cs when on holibobs and pay off by saving during the year.
We have tried to instill the same ethos in the brats who both have weekend jobs and save for the future.
I would not want to be 13k in hock to anyone, that would give me nightmares 😯

High five BenH

Another mustache follower

I think you attitude to debt depends how old you i.e if you grew up with free tuition, reasonable rents and 25 year mortgages that were not 8 times your income you are probably ok.

As a really quick aside Totalshell you mention that your building an identical extension to your neighbour. It sounds like you putting in strip footings compared to next doors piled foundations.

Please tell me someone has checked the ground out, it is feasible for the ground to vary wildly, normally on an IStructE exam question :-), but I’m hoping your neighbour has a very conservative engineer overseeing their build.

Just make sure you’re happy that the foundations your putting in will be sufficient otherwise you’ll have a false economy. Building control may be able to help but if you haven’t had an engineer look at it it could be worth it before progressing too far.

If I’ve got this arse about tit I apologise profusely, and enjoy the build process, want to go this route myself but wife has pointed out I need to spend time with my kids and bikes at the weekends. She’s right about the bikes at least!

I think you attitude to debt depends how old you i.e if you grew up with free tuition, reasonable rents and 25 year mortgages that were not 8 times your income you are probably ok.

If you grew up with paying for tuition ( when you earn enough ), expensive rents and high property prices, then how does getting into debt actually help you with any of the above ? Is it a case of saying I owe £40000 in tuition fees, what is another couple of thousand on top of that, or is there an element of impatience and entitlement “I’ll buy it on credit because I want it now and I deserve it ” ?

I think you attitude to debt depends how old you i.e if you grew up with free tuition, reasonable rents and 25 year mortgages that were not 8 times your income you are probably ok.

Not sure I agree. Me and my immediate circle of friends all grew up without free tuition, expensive rents and mental house prices – we’re all pretty debt adverse (other than our mortgages). We certainly don’t see debt as an easy solution.

If you grew up with paying for tuition ( when you earn enough ), expensive rents and high property prices, then how does getting into debt actually help you with any of the above ? Is it a case of saying I owe £40000 in tuition fees, what is another couple of thousand on top of that, or is there an element of impatience and entitlement “I’ll buy it on credit because I want it now and I deserve it ” ?

Impatience, perhaps. For me the rationale is “I can afford stuff, so I’ll buy it”, afford is relative, but I’m not worried about sticking stuff on a credit card, I rarely pay any interest, at most it’s <£50 on a balance I’ve not cleared if it’s been a heavy month. I have a fairly modest car loan, which puts our household debt right about the average, but income is above.

Paid my student loan off 2 years ago; got a mortgage, but meh, not too worried about that. I sleep fine at night, have never thought “oh shit, going to run out of money”, could manage for a while without a job.

I’d rather live the way I do than scrimp and save every penny and not enjoy myself. You can’t take it with you. YMMV.