1.6m families in 'extreme' debt

Former_MSE_Faye · 23 August 2016 at 11:41AM

Millions are spending at least 40% of their wages on debt repayments, research has found...

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'1.6m families in 'extreme' debt'

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indesisiv · 23 August 2016 at 11:57AM

The problem is that people don't think about buying things on credit until they get to a stage when they can't pay something.
This board wouldn't be here if people stopped doing that.

What is the best way to get everyone to have their lightbulb moment earlier?

Muttipops · 23 August 2016 at 12:33PM

"What is the best way to get everyone to have their lightbulb moment earlier?"

Educating children and young people about borrowing and debt at school and college and how to manage your money and budget in general.
Responsible bank accounts and loaning of money.
Curbing how much can be borrowed, amount of accounts that can be held.
Develop a culture of pay your own way and saving.
All of the above and no doubt more, so that light bulb moments are nolonger necessary in many cases.

takman · 23 August 2016 at 12:51PM

Muttipops wrote: »

"What is the best way to get everyone to have their lightbulb moment earlier?"

Educating children and young people about borrowing and debt at school and college and how to manage your money and budget in general.
Responsible bank accounts and loaning of money.
Curbing how much can be borrowed, amount of accounts that can be held.
Develop a culture of pay your own way and saving.
All of the above and no doubt more, so that light bulb moments are nolonger necessary in many cases.

I agree with the education part and the savings part but not the rest of your suggestions because they will unfairly disadvantage people who can correctly manage their money.
The banks are already strict enough on their lending criteria and people need to start taking responsibility for what they can afford.
Also limiting the amount of accounts that can be held would mean that those who have multiple current accounts for high interest or multiple credit cards for cashback, spending abroad, stoozing etc would loose out.

Also the article blames the high debt on falling wages. When in reality the root cause is people not budgeting to take into account of changes in their income.

SailorSam · 23 August 2016 at 1:02PM

Did people ever get into debt before the discovery of the credit card, when it was the norm that you saved up to buy whatever you wanted.

Former_MSE_Andrea · 23 August 2016 at 1:03PM

Muttipops wrote: »

"What is the best way to get everyone to have their lightbulb moment earlier?"

Educating children and young people about borrowing and debt at school and college and how to manage your money and budget in general.
Responsible bank accounts and loaning of money.
Curbing how much can be borrowed, amount of accounts that can be held.
Develop a culture of pay your own way and saving.
All of the above and no doubt more, so that light bulb moments are nolonger necessary in many cases.

The more people share our Financial Education section, especially the Teen Cash Class the more we can teach children and young people how not to get into debt in the first place.

Please do share them as much as possible!

Thanks! :T

zenshi · 23 August 2016 at 1:05PM

SailorSam wrote: »

Did people ever get into debt before the discovery of the credit card, when it was the norm that you saved up to buy whatever you wanted.

Vwhen I was growing up, pre credit cards, then mostly if you ran out of cash through bad budgeting then tough. Although in small villages it was quite common to get some essentials from the local store 'on tick'

sourcrates · 23 August 2016 at 1:20PM

It's also the "want it now" culture, my weakness was sports cars, when I was younger, bought the cars on credit, couldnt afford to maintain them on my meagre wage, cue the credit cards.

You then start living on your credit cards, all your wages do is pay the minimums every month, then you get more credit for something else, before you know it, your nearly 60k in hock to various banks.

Financial education is nie on non existent in schools, that needs to change, even though at the time, I earned less than 12k, I was allowed to rack up nearly 60k of debt, that must change too.

enthusiasticsaver · 23 August 2016 at 1:27PM

We drummed it into our daughters heads about the importance of budgeting and only using credit cards in emergency not just because they want a new outfit etc. Not sure why schools should take on the job of educating young people, especially when many of the people in highest debt are older.

enthusiasticsaver · 23 August 2016 at 1:28PM

SailorSam wrote: »

Did people ever get into debt before the discovery of the credit card, when it was the norm that you saved up to buy whatever you wanted.

I think before credit cards it was catalogues and HP. Still debt.

sourcrates · 23 August 2016 at 1:31PM

enthusiasticsaver wrote: »

Not sure why schools should take on the job of educating young people, especially when many of the people in highest debt are older.

They teach you many things you will probebly never need in life, such as algebra and py, but not how to change a fuse, or manage your money, lots of kids parents are just as useless with money unfortunately, just my opinion !!

1.6m families in 'extreme' debt

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