'normal' amounts of debt in this day and age

Hi,

Just trying to get my head around some money/debt stuff. We currently have about 20K of unsecured debt between the 2 of us. We earn about 35k a year in total ( me 25k, and wife 10k)

We have no problems paying it etc, although it'll be nice to save the extra money when it is gone.

I know that it's relative to income, but what is a 'normal' amount of debt for a young couple aged 30-40 to have in this day and age? I know that the average is something like 10K, so based on that figure, we are not doing too great.! Most of our friends have car loans and credit cards too so I think that our situation is quite normal??
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Comments

  • At that age the only debt I had was a mortgage
  • Grazeley
    Grazeley Posts: 72
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    We earn 60k between us and have 38k debt (plus mortgage of 250k)
  • freida20
    freida20 Posts: 14 Forumite
    I'm 41, earn approx. £22000 a year have £79000 mortgage and debts of approx. £6000.
    Mortgage start: £79,000 March 2017.............................Debts start: £6390 March 2017
    Current mortgage: £75985.............................................Current Debts: £8600
  • suki1964
    suki1964 Posts: 14,313
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    At that age, we also never had any debt other then mortgage. We now have no debt.

    We have always been ones to save up to spend, not spend what we didn't have
  • dktreesea
    dktreesea Posts: 5,736 Forumite
    Tommymxm wrote: »
    Hi,

    Just trying to get my head around some money/debt stuff. We currently have about 20K of unsecured debt between the 2 of us. We earn about 35k a year in total ( me 25k, and wife 10k)

    We have no problems paying it etc, although it'll be nice to save the extra money when it is gone.

    I know that it's relative to income, but what is a 'normal' amount of debt for a young couple aged 30-40 to have in this day and age? I know that the average is something like 10K, so based on that figure, we are not doing too great.! Most of our friends have car loans and credit cards too so I think that our situation is quite normal??


    I do think it is normal these days for people to live beyond their means. "Buy now, pay later" is very much a part of our culture. Even so, it's still a tragedy. If that debt you have, for example, is running at an average interest rate of 10% per annum then £2k a year is a lot to be taking out of your budget to finance that debt. Not to mention the capital repayment on top of that.


    If that were me and I had a brand new car in the driveway to show for the £20k, financed via a personal loan from the bank at 3.3%, I wouldn't care. I need the car, so even though the interest would still be setting me back £13 a week or so, I'd see it as a necessary evil.


    If on the other hand, I had nothing to show for the £20k, then I think that would be less typical for 30 to 40 year olds. Maybe not unusual, but not the norm either.
  • rich81
    rich81 Posts: 15 Forumite
    We earn 70kish between us and have debts close to 40K. Do we have stuff to show for all of it? unfortunately not. Some of it was used to finance a new car but a large chunk of it is down to silly spending and poor budgeting. Do I care? Yes, I wish I had been more careful, but we are sorting it out now so I try now to dwelll on it too much. I think that a lot of people have significant debts with not much to show for it. I don't think it is uncommon at all. I think that people just might not share it!!
  • timbstoke
    timbstoke Posts: 987
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    I just (this week) made the last payment on my motorbike. That leaves me with £6000 debt (£5000 loan, £1000 overdraft). I'm expecting that to increase this year as I'm getting married, but I'm not in a horrific place right now.
  • mcpitman
    mcpitman Posts: 1,267
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    I'm 38, earn ~60k, have 10k on C/C (@0%), no loans, mortgage of 110k on property of 150k value.


    Sole income earner for my dearly beloved and the 2 rugrats..
    Life isn't about the number of breaths we take, but the moments that take our breath away. Like choking....
  • enthusiasticsaver
    enthusiasticsaver Posts: 15,445
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    I am not sure there is such a thing as "normal". Personally when we were in our 30s the only debt we had was a mortgage but we have an antipathy of debt so got in the habit of saving for things when we had our first child and our income dropped.

    I think the acceptable level is supposed to be half your annual income on unsecured debt but of course it depends on mortgage size, how secure your job is, how variable your income and of course what other outgoings you have re childcare, high transport costs etc. This is why I say there is no norm. The main thing is if you are able to comfortably service it and are able to live without relying on debt to do it. Unless your debt is all 0% bear in mind everything you buy on debt is more expensive as you end up paying interest on top of the cost.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
  • Hutchch0920
    Hutchch0920 Posts: 291 Forumite
    We are 26 and 28, we earn about £59k between us and have no debts...but we've not bought our first house yet or had children so perhaps that's why. When we first met 18 months ago OH had about £7k of debt.
    Save £12k in 2017 / Dec 2017 Travel Cash = £12,400 / £14,000 88.5%[/COLOR]

    House Deposit = £20,500 / £18,000:money:
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