Why is personal DEBT so high in this country?

SingleSue

I have noticed that too Clapton and it is one of my many 'lectures' to my eldest son as he is planning on going to university.

Think I have finally got through as he is planning on attending a local university and living at home so he doesn't have to take on huge amounts of student debt.

squirrelchops

Chopperharris......that post is brilliant.

It os so true that many live in an 'instant gratification' way of life. It makes me questin as to where is the pleasure in buying things you have saved hard for when one can just flash the plastic and buy it now. Many will remember the thrill of saving, planning and working hard and how proud and happy of whatever it was you had bought was reflected as a constant reminder of what you had done to purchase it.

I, for example had a friend who so loved 'shiny new things' that would constanlty be out buying makeup and beauty products. She cam to move and threw away a bin bag full of expensive things that were out of date or she didn't like anymore. Alas, the buzz for her lasted until she go the packet home. Now, she is in debt severly and an IVA may be her next option.

My OH and I frequently discuss why people move house to a place they don't really need bu 'oh our salary multiplied by xx says we can afford it'! What is the point...there is only the 2 of us in a 2 bed house.....we could afford bigger but why stretch ourselves. AND we are the Jones's...literally in name but we don't have the flash electrical equipment or new cars or infact anything others may want to keep up with us for!!!!!!!

dad-of-4

dervish wrote: »

When watching thre excellent DAILY POLITICS today Neil Armstrong referred to the fact that Britain had the highest ever personal debt in HISTORY!

How has this happened?

Why is it only really happeing here?

Is the government complicit in this?

personaly i think its been used as a distraction from the high cost of living in the UK and the poor wages were paid in the UK relative to the high cost of living. when you take into acount were a consumer based ecconomy, its inevitable that we (the nation) would have massive debt.

abaxas

Consumerism is a religion, buying expensive tat is your heaven.

mbga9pgf

Well, welcome to hell... Paying off the balance

GrammarGirl

SingleSue wrote: »

I have noticed that too Clapton and it is one of my many 'lectures' to my eldest son as he is planning on going to university.

Think I have finally got through as he is planning on attending a local university and living at home so he doesn't have to take on huge amounts of student debt.

Don't you feel he will miss out on the whole 'university experience' by staying at home, just to avoid probably the most manageable debt he will ever have to take on?

I stayed at home in my first year of uni for exactly the same reasons - my mum had always brought me up to think debt was bad (which of course, it is) and I hated the idea of a loan hanging around my neck. I missed out on so much in my first year that I grabbed the student loan with both hands and moved out in my second year.

I had a part time job throughout uni and was sensible about my level of debt. I loved the freedom and independence living away from my mum gave me, but I didn't go crazy. I haven't been back home since moving away in my second year, and although I DO have a level of debt, it's small, manageable and has taught me how to budget and plan my spending.

I'm just curious to know if people think choosing a different university experience to avoid student debt is worth considering in the current climate. It's an interesting point to argue, I guess.

CLAPTON

GrammarGirl wrote: »

Don't you feel he will miss out on the whole 'university experience' by staying at home, just to avoid probably the most manageable debt he will ever have to take on?

I stayed at home in my first year of uni for exactly the same reasons - my mum had always brought me up to think debt was bad (which of course, it is) and I hated the idea of a loan hanging around my neck. I missed out on so much in my first year that I grabbed the student loan with both hands and moved out in my second year.

I had a part time job throughout uni and was sensible about my level of debt. I loved the freedom and independence living away from my mum gave me, but I didn't go crazy. I haven't been back home since moving away in my second year, and although I DO have a level of debt, it's small, manageable and has taught me how to budget and plan my spending.

I'm just curious to know if people think choosing a different university experience to avoid student debt is worth considering in the current climate. It's an interesting point to argue, I guess.

Interesting point and as an argumentative point then:

Suppose we said that EVERY young person could get a tax payer funded loan so they could leave home and enjoy the experience of living away and having a good time?
After all why should young people who go to work, subsidise the optional social element of student life? Most student live within commuting distance of a Uni (not all but most).

carolt

CLAPTON wrote: »

Although I agree with a lot of the previous posts, there is one area where the government's direct action have encouraged debt. That is in the area of student loans.
Leaving aside whether they are good or bad, it does mean that most graduates leave Uni with debt.
And consider debt as 'normal'.
I've spoken to many graduates who are off on a gap year on borrowed money.
When asked about using borrowing to fund a what is basically a holiday they take the view they are already in say 15,000 of debt so a few extra grade makes no difference.
And I've found it a little difficult to make a convincing case for saving first them travelling.
I'm not making an excuse for them and of course many don't do this but it's been one more contributory factor to a change in attitudes even of otherwise sensible level headed people.

Great point, CLAPTON - many of those who pontificate against the spendthrift young benefitted from free education themselves, plus grants on top.

As one of those lucky ones myself, I can't imagine how hard it must be for the current and recent student generation to pay off student debt AND pay for everyday expenses when starting at the bottom of the career ladder AND be expected to save a large deposit for a house.

And to argue that young people shouldn't take on debt if required to go to university to better themselves and improve their life chances seems a very short-sighted view to me, and one that if faithfully followed would return us to an era where only the rich were able to benefit from higher education.

mbga9pgf

One thing about student debt though its... different. I agree it gets individuals in a mindset that debt isnt bad, which isnt good. But, let me give you my wifes case. 2 student loans, one for degree second for education as a teacher. total debt around 25K.

She is currently unable to repay the debt as her earnings do not meet interest accrued.. But thats not a problem. Why? Because the minute she stops work, she stops paying it. If she were to decide at a later stage to become a stay-at-home mum, not do another days work in her life (she will, this is an example) she wont pay a penny towards it. Any debt remaining at pensionable age gets written off. Thank god. As all assets are held in my name, (savings) she avoids the requirement to make overpayments annually.

Another great big steaming pile of debt that Gordon is resonsible for, and will have to write off at some stage in the future.

Be interesting to see how they are funding the student loans with the credit crunch at the mo; I would imagine they sold the debt on as complex instruments. None of that from now on.

I managed to pay off 12K in 6 years. But I have a good salary.

GrammarGirl

CLAPTON wrote: »

Interesting point and as an argumentative point then:

Suppose we said that EVERY young person could get a tax payer funded loan so they could leave home and enjoy the experience of living away and having a good time?
After all why should young people who go to work, subsidise the optional social element of student life? Most student live within commuting distance of a Uni (not all but most).

Very true. But the optional social element of student life is (for the most part) offset by the hard work and dedication put into a degree, along with the additional part time jobs worked to keep the student loan debt as minimal as possible. I often look at my friends who didn't go to uni and wonder if they made the right choice - most have their own houses (maybe not so good in the current climate, but still an asset!), nice cars saved for and paid for outright when they were living at home with no rent to pay, more disposable income... generally they have progressed further down the line in life than I have, because the 3 years I spent at uni were 3 years I missed out on moving forward with life! If that makes sense. Time seems to stand still when you're a student!