Why do people get in debt?

chevalier

I think people get into debt, in part, because they don't realise just how LONG it will take to payoff a debt if they only pay the minimum amount

HappyIdiotTalk

I left school and joined a YTS scheme. £40 per week for two years plus £150 bonus every three months. Was hardly ever in debt and still managed to go out every week (no idea how I managed that).

From YTS I went on to to be an Office trainee because of my excellent attendance record. Money increased... but not by much. Still no debt problems.

After about 7 months of this I was taken on as a Finance Officer as a proper employee with a salary of £11,000 a year, big jump when you have very little out-goings. Still no problems with debts though.

After a few months of that I was sent to Northampton to work in pensions which the company wanted to bring back to Birmingham for costs savings. This is where I lost control. I was getting 3 hours a day overtime, thats 15 hours a week and 60 hours a month. I was rolling in it and picking up nearly as much as I do now!

The office I worked in was right in the middle of the main shopping centre. At lunch time I used to get into the lift, come down a few floors and hit the shops. If I wanted something, I bought it, and I could afford to. But I still managed to spend all my money in the first couple of weeks. But never got into any serious debt or anything.

Then after the move to Birmingham the overtime stopped. But my spending didn't. Those months of wanting for nothing had ruined my sense of value and I've never fully recovered from it. I got into what I thought was serious debt, but some of the stories on here make me look like a beginner.
I dont think I've ever got past 7k of debt.

I tried to work my way out of this and did loads of overtime at work, and worked saturdays in london for Sainsburys. I used the money earned to pay whoever was sending the red letters that month. Eventually I cleared enough of it that I could manage it. But I've been skint ever since and have bounced around 3k to 4k of debt.

I would have been debt free by now, but buying this turned out to be more expensive to live in that I'm used to has slowed me down. Plus getting married twice last year knocked me back... Then theres my daughter and wife out of work on maturinity leave... Another child any day now...

The good news is I followed Martins nag about miss-sold endowements and should be receiving a cheque from L&G for £12,000 any day now! This will clear my credit cards and wipe out my car loan! Whoohoo!

GreyPilgrim

woohoo_postingid wrote:

Going to uni did it for me, then living the uni lifestyle with my earnings from work when I graduated - out most nights spending money instead of saving!!!!!!!

Can only speak for myself here, but as a student the word "saving" never even entered my consciousness - "Saving" was something that was lumped in with "mortgage", "pension", "gardeners question time", "carpet bowls" and "liver spots"...something that happened to other, older, more square people.

Anyone got a time machine so I can go back and beat some sense into me?

GreyPilgrim

Oh yeah, smoking was a big cause too.

kenshaz

People get into debt because we live in a materialistic society fueled by market forces and mass media advertising,which becomes accessible because of credit which is marketed in an unscrupulous manner

awaytogoyet

Firstly, I'd like to say that I don't care how people got into debt either - or stand in judgement anymore (I probably used to - I was a bit of a smug git, I think!). What is interesting about this thread, though, is that it highlights the variety of reasons and experiences behind every debt situation. It also highlights the range of people it affects.

Secondly, I'll confess to having lurked around this Forum for a couple of months now - & what a lifeline and inspiration it has been. Martin & you guys on here deserve a medal for literally turning around people's lives. Debt is a very lonely place - it's easy to feel ashamed and to think you're the only one sinking deeper and deeper in it. Here not only can peeps get the most amazing range of practical advice, but the emotional support and encouragement you need to face up to it and believe you can get out of it.
It has taught me to look at it 'in bite-sized chunks', tackle each one and move forward slowly. As my user name suggests, I've a way to go yet (well quite a long way actually!), but I do now believe I can do it. From being in a state of total despair, unable to sleep etc. etc. - it has now become a challenge that I can get my teeth into it and really believe I

livinginhope

I was one of the most organised people ever with money,I had a little book that was filled with EVERY expense,even a packet of sweets.When we took out our first mortgage the building society were astonished at my budgeting.
Then illness struck,time off work,self employed and no pay,hubby was left to sort money,bad idea,then kids and even more illness,then redundancy 4 times in a row,car accident and to top the lot the house burnt down (underinsured)followed by yet another redundancy,how much can a family take,we are all still fighting back and determined to sort this out together,things are very tight,but we are happier than ever.I have my little book back in order,hubby now understands the need to fill it in and despite continued illness,we are now in control again

awaytogoyet

awaytogoyet wrote:

Firstly, I'd like to say that I don't care how people got into debt either - or stand in judgement anymore (I probably used to - I was a bit of a smug git, I think!). What is interesting about this thread, though, is that it highlights the variety of reasons and experiences behind every debt situation. It also highlights the range of people it affects.

Secondly, I'll confess to having lurked around this Forum for a couple of months now - & what a lifeline and inspiration it has been. Martin & you guys on here deserve a medal for literally turning around people's lives. Debt is a very lonely place - it's easy to feel ashamed and to think you're the only one sinking deeper and deeper in it. Here not only can peeps get the most amazing range of practical advice, but the emotional support and encouragement you need to face up to it and believe you can get out of it.
It has taught me to look at it 'in bite-sized chunks', tackle each one and move forward slowly. As my user name suggests, I've a way to go yet (well quite a long way actually!), but I do now believe I can do it. From being in a state of total despair, unable to sleep etc. etc. - it has now become a challenge that I can get my teeth into it and really believe I

Sorry - got carried away & hit the button ! To continue....
............and really believe I can conquer. That's not to say I still don't have panic attacks and bad days - but the positive is now outweighing the negatives.
I'll never be able to thank you guys enough.
The totally non-judgemental way you approach it is brilliant.
One of these days I'll get round to posting my SOA as I'm sure I could still do with some more help.

Anyway - how did it happen?
Well - we came from poor backgrounds, had a strong work ethic, worked very hard and made good. Had a couple of businesses set up early 80's (much easier to make money then!), worked night and day, made good money, had a great lifestyle. Spent well too - lots of socialising with friends (so-called), designer clothes, holidays, meals out, gadgets etc. etc. etc. Didn't save very much - couldn't imagine the bubble bursting! Head up our a***! Got too confident, I guess (greedy even - quit whilst you're ahead would have been good advice!), took on another business - disaster!!! The time spent trying to salvage that impacted on the other businesses & they all ended up dying a death! No probs, I thought, we'll downsize house & I'll get a job. Downsized house, wrong time, lost money - but still OK'ish. Never ocurred to me I wouldn't be able to get a job, though - now wrong area, too old, too long self-employed, skills now redundant (largely been replaced by ICT). Ended up working night & day doing any menial job I could get hold of - OK'ish again. Then had an accident - unable to walk for nearly a year (no insurance!) - back again to menial jobs, OK'ish, then Hubby very ill & major op. - off work for another 12 months! Then did a couple of stupid things to try and get out of the debt that was building up, which only made it worse!

But, I have to say, I think I'm a much better person for the experience - more tolerant, not at all smug anymore and appreciate the important things in life -those you love & love you. Gone are the pseudo friends and the pseudo life-style. I now earn less in a week, than I did in a day and my food budget for the month is less than I'd have spent on one meal out.
I'm now Mrs Scrimper Extroadinaire & largely thanks to you lot actually enjoy my R&R's, Boots Glitches, Boots Sales, BOGOF's & 198 things to do with pasta.... etc. etc.
I just, now, need to get a more regular income than I've currently got to help service the debt - the erratic nature of it at the moment is a bit scary. But, I'll do it, I know I will & so will everyone else here - onward & upwards! And thanks again.

bargainbetty

wendym wrote:

I think that we now expect the impossible of young people. We encourage them into debt that would have been unthinkable for us, in order for them to study.

When I am in charge, everyone over the age of 40 who got a grant to study will pay an extra tax to help today's students.

Sorry, but I disagree with this one. I worked out how much I would need to pay my way through Uni, and realised I couldn't go. I got a job to try to save and watched a lot of my friends get deeper into debt because they didn't think about budgets etc. I have finally realised I will never be able to afford to go back into full time education, so am now using the Open University.

How is paying a tax once you hit 40 any more or less fair than repaying your own study costs once your income hits a certain level? How about making key jobs better paid instead so the people who invest in them DO reap rewards.

I had a flick through the newspapers during Uni Clearing and noticed a course called 'Adventure Studies' - something about organising activites on adventure holidays (abseiling etc). Sorry, I resent paying taxes for someone to study that!!

BTW - I'm in debt because I was daft. Spent more than I earnt, and spent too long thinking that minimum repayments were brilliant. Then I got divorced and found that I had to pay all the house bills instead of half, and it took a while to adjust. My own damn fault.

I did have the sense to not sign up for 3 years of debt, but forgot to avoid the rest!

Firefly

I'm not a wannabee socialite, just a mum who needed to put food on the table for three children after she was taken for a ride by ex husband who left. I ended up with the bill for him to set up his new life (joint loan). :mad:

Although I'd never been brilliant with money I was always able to cope until the rug got pulled from underneath me. Perhaps I was blinkered and should have seen it coming - I didn't and ended up in debt. It's easy to fool ourselves and do things to make us feel better and until we examine our reasons for spending we will stay in debt. It would be good to say it's as easy as spending beyond your means but it goes much deeper than that.

The end of my debt days is within a hair's bredth.