Why do people get in debt?

cantcope

Mine was caused when i bought a laptop and found flashing shiny lights on the casino banners.

All down hill from then on and i am now a compulsive gambler.

shayshay

I got into debt as I wanted the nice things, good holidays and always to be seen as having money. Me and my ex always had money, bit like the posh and becks of our area so we never went without. Stupid and very stressful, wasn't the reason we split though. But I used to get so stressed about it and will always remember what my ex's dad told me, they can't kill you for being in debt, so whats the worst that can happen and from that day have not got as stressed apart from speaking to MBNA but thats another story.

I would feel much happier if I could point at a custom motorbike and say thats my £13k debt but I could point at CD's, videos, nights out, takeaways, football tickets, gigs etc of which there is no real value apart from memories. yes they were good and equally patying the debt back and scrimping and saving is a bad one but its sure to be one I remember and not make the same mistake again!

MoneyMagnet

Great question & interesting thread! For me it was going to university combined with simple bad money management.
I lived in my student overdraft for the whole time I was studying (which I thought was ok, as it was interest-free), and then last year racked up a lot of purchases on my credit card, buying stock for my part time jewellery biz. That would've been ok if I'd just bought the essentials, but I got carried away & now have enough supplies to keep me going for years! I also owe a bit to my BF, as we bought a house a couple of years ago, & he paid my share of the fees, as I couldn't afford it at the time (he earns a lot more than me).

I guess I'm fortunate in that I have a lot of 'stuff' to show for my debt, which I can sell. I also don't overspend for emotional/compulsive reasons, so I've found it very easy to cut right back since having my light bulb moment earlier this year.

It might sound odd, but I don't regret getting into this situation. I'd obviously rather not be in debt, but it has really motivated me to learn how to manage money properly for the first time in my life, and I'm now determined to not only become debt free asap, but beyond that, to become mortgage-free, and then totally financially independent. I'm having lots of fun learning about investing etc, even though I don't have anything to invest yet!

lady_fuschia

Like most people, there's a mixture of reasons for mine- some my own stupid fault, some just circumstances I couldn't really control:
- Going to uni. I wish I could tell all 18 year olds in the country to only go to uni if they're going for the sake of the education/ experience itself. Don't go 'cause you think it's a financial investment. Its not. I earn less than most of my friends who didn't go.
- Smoking. Stupid girl. Given up now.
- Getting dumped for rather high-maintenance designer-clothes type and tried to salvage my self-esteem by competing with her. (despite the fact my salary was half hers!)
-Moving in with OH who already had huge debts
- Going back to uni on impulse and taking out loan to do it, instead of saving up (its worth it, but still hurts!)
- Moving to new area with much higher living costs than we were used to
- OH being out of work for three months and me being out of work for 8 weeks during the same time period.

I think you'll find there's usually a mixture of reasons. I totally blame myself for my debt, but I can't help thinking if credit wasn't so damn easy (its easier to get credit than it is to get a job for christs sake!)to get I would've been more inclined to try and find alternative ways around the problems earlier on.

Luckystepho

Mine is cos I was made redundant and homeless 10 years ago, got an extremely low paid job in a factory, new flat needed completely redecorating and furnishing and couldn't afford to live on my wages... got a new job but had to work 6 weeks before getting paid as I started just after pay day...

Did the consolidation then run-cards-and-overdraft-right-back-up-again thingy several times!! Plus spent on things I really 'needed'- such as holidays and cars, getting a bit deeper in debt each time and now owe £21,000. I can manage the repayments but keep thinking what I could do with the £450 each month instead of servicing my loans!

Trouble is, it is so easy to get credit, and banks seem to sell consolidation loans as the answer to everything! I also think a factor for being in debt is that because we need to pay out so much a month in debt repayments, we are not able to save anything, so when something goes wrong, ie car breaks down, fridge blows up etc etc there is no surplus cash for it, so a repair/ replacement is put onto credit cards, which increases the debt, so it's a vicious circle really.

The one thing that everybody here has in common though is that we have all realised that we have a problem and are trying to address it, which I think is a major acheivement!

jen30_2

I think the reason Me and my OH have got into debt apart from both of us being completely rubbish with money etc is that we buy things to make us feel better - both of us had difficult childhoods and carry around the baggage from that. Plus I have until this year been spoiling my kids because I didn't have much when I was little. I've now gotten tough and have explained to my kids that money is tight and if they want something they have to earn it or save for it.They now love going to carboot sales for toys instead of the shops. I was also off work for 6months due to stress - my boss made me ill(long story) but I've now got another job I love and things are looking up. We can afford all our repayments and we've stopped applying for loans to consolidate (learnt our mistake there too). OUr plan is to now get debt free nad if we want something - save up for it & pay cash rather than getting another loan. I also plan to teach my kids how to budget and look after their money.

msmicawber

I've just got round to reading this thread, and agree with Southernscouser - I don't really care how people got into debt, but I can empathise with them. Some people's circumstances twang my heartstrings more than others but if I can help and encourage, and receive that back when I need it that good for me.

loopyloulou_3

mine was being given a CC on my 18th B-day and not thinking as far ahead as the concequences!

buying a car with a bank loan and stupidly taking the advice of my bank and consolidating CC and loan to an even bigger loan!

flowerofscotland

Gorgeous_George wrote:

Having read some of the posts on here, I got to wondering why/how people get in so much debt. I know there'll be 101 reasons/excuses, but if the causes of debt were talked about more openly, perhaps more people would be able to avoid it.

Seeing that some people owe more than a year's salary on credit cards is really scary. Why do they allow themselves to get in such a mess?



GG

Because we are human.

Why do people "allow themselves" to become alcoholics, addicted to gambling, drug addicts, smokers, drive too fast, talk on their mobile phones while driving, eat unhealthy food, steal, lie, cheat, bully, violent etc etc?

I suspect there are as many reasons as there are people in debt even though there will be common threads - many of which can be called "life".

Would have felt a bit more comfortable about you asking this question if your signature showed that you were in debt - perhaps I am being overly sensitive but the tone of your message seems rather smug to m`e.

What I have seen on this board has been a lot of mutual support and encouragement which is wonderful.

JMHO

newleaf

I bought things I wanted (as opposed to needed) with money that wasn't mine and I didn't pay it back quickly. I have been doing this since I was 18 and got my first Barclaycard. I carried on buying what I wanted. I felt entitled, because I have a good job and a safe,regular income. My credit card bills got bigger and bigger but still the penny didn't drop because, although I looked at them, I didn't think about what they meant in real terms. I consolidated. That made it easier to carry on buying anything I wanted. I consolidated a few more times. I cashed in insurance policies, paid some credit off, but all along I carried on buying anything I wanted.
I had my LBM in May this year, when my very well paid husband was threatened with redundancy and I realised I might have to pay the bills for a while. I realised just how much trouble I was in and thanks to MSE Martin (who I first heard on Radio 2) I stopped spending money and started paying it back. Thankfully my husband managed to hold onto his job, but it was the wake up call I needed, and I am on my way to becoming debt free by the end of next year.