How much debt?

Thankfully no debt at all at 44 but then again i don’t own a house, been in the same council now housing association bungalow for the past 20 odd years – thankfully it’s in a really nice area of Galloway and rent is only £60 ish/week so i’m perfectly happy – no kids so what meagre amount at minimum wage i earn is mine to do with what i want – i’ve never earned enough to get a mortgage to buy a house but it’s not something i’ve ever bothered about.

Some of the debt in this thread is horrific though, good luck to all so you can get it cleared

Inbred456 – Member

What amazes me is we have a decent income not that much debt. We save up mainly for things we need etc etc. People we know on modest incomes have just seemed to of gone mental spending. Brand new cars extensions multiple foreign holidays!!!!! How the bloody hell is that possible!

Perhaps their income isn’t as modest as you think, when was the last time someone really said “I earn exactly £x a year”.

When it comes to personal finances you might be amazed what’s possible, but since 2007 at least it’s now difficult to run up massive amounts of debt relative to your income, no more self-certing a mortgage 10 times your income, no more 110% mortgages and blowing the surplus on a conservatory and a cruise, no more 2x times your salary on the credit card paying the min 5% each month and spending it again or a new car on HP every year and letting some fast talking finance manager hide the shortfall from the last one in the cost of the new one.

Some people save well, some people spend well and some people do both, some people inherit pots of money, some people get 5 and the bonus ball and don’t tell a soul. I don’t believe there’s a right, or wrong answer to how much debt you should have, how much you should spend, how much you should save – some people spend and save like there’s no tomorrow, some people spend and save like they’re going to live forever.

Sometimes though the answer isn’t their income or their expenditure, but their circumstances – one of my closest friends has a AMG Merc, seemingly just to drive to the trail centres at the weekend, he’s just changed his very, very nice Carbon MTB for the latest one of the same model because it’s a bit different and doesn’t seem to worry about money at all – lucky him, my Bike is old and knackered, my Car comes with my job and I’m broke most of the time – I don’t know how much he earns exactly – but I’d guess it’s +/- 10% of my income, I don’t begrudge it – I’ve got a Wife and 2 kids to support and he doesn’t – AMG’s are thirsty, but they’re cheap as chips compared to Childcare fees – I could probably lease a Maserati (where I got the idea for one of them I don’t know) for the cost of keeping my Daughter safe whilst I work to pay for it.

Not all personal debt is caused by splurging on big ticket luxury items, just to let you know.

dazh – Member
Why are some people not including mortgages in their debt burden BTW?

Partially it’s because it’s debt secured against an (generally) appreciating asset and if I had to I could sell it cover my debt and recover any equity.

But mainly unless you are in the extremely fortunate position of owning outright you have a monthly cashflow liability for housing anyway be it mortgage repayment or rent and around here the difference is SFA. If I didn’t have a mortgage I’d not have more money every month, I’d still have a contractual obligation to pay someone an amount for a fixed period if I wanted a roof over my head and that money would be doing nothing.

I think that makes it reasonable to consider differently to ‘typical’ unsecured debt in the form of loans, CCs, etc.

too true Mr grips, but this is STW…

(how many woodburners/trips to whistler/Vw T5’s have been paid for with loans and credit cards i wonder? No doubt most of us pay for our toys with our enormous christmas bonuses, but i’m sure there’ll be a few struggling to keep up…)

dazh – Member

Why are some people not including mortgages in their debt burden BTW?

1. You’ve got to live somewhere.
2. Mortgage payments are often less than similar rent.
3. Paying rent is a short term view – you are paying your landlord’s rent and won’t have an asset at the end.

Mid-20s, no debt, 4x salary in savings and separate deposit fund (without help still a good 5 years off buying a house).

Noticed something interesting at the Xc race the other day.
There seemed to be two distinct types of rider;
1. Bangernomics/functional old car
2. Expensive ’15/16 reg van, VAG, camper
They all had several thousand pounds worth of bike strapped to them though.

There was a distinct lack of middle ground in both car value and bike value.

It makes me wonder which of these two group (in general) have more unsecured/personal debt?

as opposed to using leverage to buy more of something that’s appreciating in value

And people wonder why house-price bubbles happen! Mortgages are obviously the safest and best form of debt to have, but it doesn’t mean you can disregard them as a debt. You don’t own the house until the debt is gone, in that time a lot of things can happen, recessions, price bubbles bursting, ill health, negative equity, deflation, credit squeezes etc. All of those can combine in various ways to cause you to miss repayments and lose your property. Losing a house with half the mortgage paid off is a lot more painful than having a maxed out credit card.

Interesting. About £15k of debt for me. Don’t have a mortgage, always rented. I’m 33. £10k is an unsecured personal loan that is for stuff I know longer own (cars, bikes, other material stuff et al) and about £5k on credit cards. If I continue the payment plan I’ve been on for the last 5-6 years, it’ll all be gone in 2 years.

I’ve made some stupid decisions.

Oh, and I have zero savings, never have.

We’re in our mid 30s and no debt, but we’re getting another mortgage and bigger house. Should hopefully be back to no debt again in around 7 year’s time though.

I’ve never lived with the idea that loans = money. I’ve always viewed life with the thinking that if you want something you need to gather enough money to have it. And we’re very comfortable. Felt so great to have my boy born into a home that’s not worried about money, simply because we don’t spend lots.

Paying rent is a short term view – you are paying your landlord’s rent and won’t have an asset at the end.

Assuming house prices rise and rent is more than return that could be had by buying other assets such as equities. The reason so many of us have done well out of property ownership is the combination of leverage and price increases.

All interesting, 200k mortgage, but only 10 years left. No loans, no credit cards, couple of pcps for cars £500.
Nowt in savings, pension shite, just focus on getting mortgage paid as quickly as I can.

1. Bangernomics/functional old car
2. Expensive ’15/16 reg van, VAG, camper
They all had several thousand pounds worth of bike strapped to them though.

There was a distinct lack of middle ground in both car value and bike value.

It makes me wonder which of these two group (in general) have more unsecured/personal debt?

Someone I encountered recently through work has all the trappings… big house in Cheshire, mahoosive merc with the obligatory private plate, Trophy wife (who doesn’t work but does shop) kids in a posh fee paying school. etc, etc…..

A colleague who knows him well said he’s panicking at the moment as, as well as servicing his ****ing enormous mortgage, car loans etc etc, he personally (not his wife, just him. God knows what she’s got also) has over 75 grand of debt on various credit cards 😯

Now to me, thats the tipping point. Is that your problem? Or the banks?

£560k on Mortgage, nothing anywhere else (probably £35k or so in a couple of savings accounts). Fortunately young enough to have it hopefully all covered in time for retirement 😛

75 grand of debt on various credit cards

0% balance transfer out of the question on that amount I’d guess 😯

Frankly this whole thread is rather vulgar IMO 😐 as my mum would say 😉

And people wonder why house-price bubbles

I’m not convinced you can get bubbles in something people actually need.

Now to me, thats the tipping point. Is that your problem? Or the banks?

It’s not the bank’s, but as a bleeding heart lefty, I’d say there is a societal responsibility somewhere. Actually no that’s b******. He deserves to go under, and it will be the most valuable lesson he ever learns.

I’ve similar examples of people I know, including the couple who live in Dubai who have 200k credit card debts despite the fact that the husband earns a 300k a year tax-free. And the people who bought a house for 80k in the 90s who now have a 25 year 180k mortgage and are living in the same house with negative equity and complain about being ‘trapped’. Not to mention the boy-racer I know who is paying for two cars he’s now written off after driving like a dick. This is what happens when stupid people are allowed to do things they don’t understand.

Frankly this whole thread is rather vulgar IMO

It’s the “Not wanting to talk about money because it is rather vulgar” thing that gets people into trouble in my opinion.

People being open and honest about earnings and debts can be pretty useful. Why dismiss other peoples life experiences as rude?

It may be vulgar, but it’s making me feel better!

Someone I encountered recently through work has all the trappings… big house in Cheshire, mahoosive merc with the obligatory private plate, Trophy wife (who doesn’t work but does shop) kids in a posh fee paying school. etc, etc…..

A colleague who knows him well said he’s panicking at the moment as, as well as servicing his ****ing enormous mortgage, car loans etc etc, he personally (not his wife, just him. God knows what she’s got also) has over 75 grand of debt on various credit cards

Now to me, thats the tipping point. Is that your problem? Or the banks?

That sort of thing happened A LOT in the 2000s (I worked in finance for posh types for a long time and got to see peoples income and expenditure) and people got away with it by constantly remortgaging and ‘releasing equity’ to pay off the credit cards etc and starting the cycle all over again.

Nowadays it’s not supposed to be possible either 1) the Banks they owe the money to haven’t taken a proper view of their income and expenditure and have lent too much – that would be their problem 2) he’s lied about his income / expenditure and it’s his problem.

Either way, the end result is the same, as complex and brutal as it can be sometimes the laws on personal finance in the UK are fair, if he cannot control his spending there will come a point when he can’t borrow another £ and it will all come to a grinding halt – I’ve seen it happen, people who seem to be very rich, earn very good money and live in very good houses – suddenly hit a wall – they’re skint, their cards are maxed, they’ve got no cash left and they can’t fill the 4×4 or buy food – I’ve had to tell people in a roundabout way they not only can’t they have the 911 they want to finance, they are all but bankrupt and their outgoings are higher than their income and when they run out of credit – they can’t buy food – the look of shock on their face when they realise that for all the houses/flat they think they own, but they’ve spent the equity on the next no-lose-gamble property deal, the 0% transfer deals on their credit cards which made it all free and cheap loans they’re not actually rich at all, they’re completely and utterly broke.

But as I said at above, the system is fair – if they cannot pay, they don’t have to – but they have to admit to a judge that they cannot manage their own finances and they’ll take all their assets, sell them and split the proceeds between their creditors – they’ll all lose, but if they did their job properly they wouldn’t have let things get that far.

When the banks fell, the Government of the day imposed new rules before they allowed the bail outs – in short it was to save us all from ourselves – Banks are required to check whether someone can afford to do, what they want to do – this meant the silly ones couldn’t borrow any more than they should and they had a 0% base rate to ease things whilst they got their affairs in order – they’ve had 8 years to do it now, no doubt when rates finally rise again some people will be cursing their luck and crying off to the Bankruptcy court – but they’ve only got themselves to blame.

I’m not convinced you can get bubbles in something people actually need.

The hundreds of thousands who were repossessed in the 80s and the millions in the US who were repossessed after 2008 would probably disagree 🙂

Ex wife left me with £26K debt after our business got swallowed up in the divorce… thankfully didn’t go bankrupt and worked my ass off to clear it.. 10 years later its a lot simpler £900 on an interest free card but savings can cover it, no mortgage and we paid the car off last year. Being self employed has made me more thoughtful with money and where it comes from.

In a previous job, we would sell electronic kit to customers, when they were refused finance after appearing as a dead cert sale the reasons would make your hair stand on end. The level of debt for some was staggering.

Interesting how your attitude to debt changes over the years. I’ve recently managed to clear our unsecured debts entirely leaving us with just a mortgage. We gave a great big collective sigh and agreed we’d do our best to never get in (unsecurd) debt again. In my early 20s the then gf and I used to ring up the CC company, increase our spending limit and then go to the offy. We could not care less.

As warren Buffett said when the sea goes out you find out who was swimming naked.

No debt and the Mrs owes me the £80 quid I paid to the lbs for repairs to her bike yesterday

As warren Buffett said when the sea goes out you find out who was swimming naked.

Not being vulgar, I’ll not post my debt… But if the sea goes out, I’ll not be in my boardies… :P!

Business loan that’s 4 years into 25, SE England mortgage, wife and 2 kids, 39 and going grey…

If it all works, I’ll be laughing in 20-30 years time!

I was mortgage free at 33. Then last year we moved to larger detached house, so a decent sized mortgage now.

No other debts though. I was quite bad with money in my 20s, racking up several £x000s on loans and CCs. Got my act together and squared them up before I hit 30.

I was mortgage free at 34…although tbf I didnt own a house either.

I was mortgage free at 34…although tbf I didnt own a house either.

🙂

In addition to salary, value of house, etc. please could everyone describe the size of their penis too ?

Because that’s what this thread is really about, isn’t it ?

My penis is as big as my debt.

Massive and keeps me awake at night.

^ two post in a row 😆

Age 37, only debt is about £100k mortgage on a £200k house. Paying off over £1k per month which would clear it in 11-12 years. Pension contributions sitting at about £70k, £20k+ in cash savings and about £10k in a s&s ISA.

Last consumer debt was a loan for a car (not the full value, the difference between my savings and the price) 8 years ago. And a bike I bought on 0% finance over 12 months maybe 5 years ago because the money was earning interest while I paid it off.

I’ve got some savings and a pension….WTF happened to me, man?

Yeah, but how big is your fella? 🙂

Seriously, what a dreadful thread!

Bout the same as my savings

Actually, just realised something. After being deep in the red overall for most of my life, lately the equity in my house together with my pension pot outstrips my debt by a big margin. So maybe it’s not so bad after all! I might be worth something net!

We’ve decided to kill the mortgage whilst interest rates are low. I’m 39 and have 8 years to go on the mortgage, we only took it out 5 years ago. No credit cards, no store cards etc etc… we would love a new kitchen, a new bike etc, but we’ve agreed to save for it and if we cant afford it, wait until we can.

I have friends on the other hand who have £300k mortgages, a car on the drip, massive holidays and i know for fact they cannot afford it. No savings, no real pension conributions. A car crash waiting to happen, but there’s bloody loads out there like that. It would send me to an early grave personally!

Debt is only truly debt if the value of your assets is less than the money you owe. This is why Farmers always look like they are loaded (well at least while agricultural land is £10k an acre) debt is only relevant to circumstance and assets.