Moral Question: If you have debts, should you spend money on luxuries?

sickbean

Easy one for me at the moment - I literally don't have any money spare for them!

I've read a lot of people who say that so long as you have debts, you should only spend on absolute essentials (no takeaways, new clothes, meals out, drinks, holidays etc)

Just wondering what people here think? If you're considering buying something, do you stop and think 'well that could pay £50 off the mortgage instead'

Tixy

I think if you have debts you cannot afford to service then its a no to luxuries like holidays etc. But rather than think about essentials I think of 'basic' household living costs as being okay - eg a mobile isn't truly essential nor new clothes but I think spending a small amount on those in reasonable. Even on a DMP you are expected/allowed to pay money on things like haircuts, clothes and a small entertaiment budget.

If you are in debt but can afford to service it then whilst it would be advisable not to go mad with luxury spending I suppose its down to the individual and how quickly they want to clear their debts/whether they are prepared to pay the additional interest etc. I don't cut out all luxuries but I do make sure I can make debt repayments first!

sickbean

I suppose it's quite difficult to define essential too - my best friend is a bit odd in that he has no phone, no TV, no cooker, no shower, no carpets, no furniture for the most part (I could go on).

He makes more money than me so could easily afford any of them, but when I ask him why he says he just doesn't care about any of them.

But then he will go out and spend £7000 (cash) on a new watch.

Like I said, weird bloke.

Xbigman

Yes it is OK. You still have to live. Try to put some money in your budget for 'pocket money' or 'socializing'. £10 a month is enough to just give you something to have in your pocket.

This is, of course, very circumstantial. If you don't have even a few £'s you can't spend it. On the other hand, if you're overpaying on yor debts to clear them then even an odd blow out is ok.




X

Jimby509

Hard to answer as it is dependent on, what type of debt, e.g. morgage or a loan from a friend? What do you class as luxuries, e.g. world cruise or bar of chocolate and a good bottle of wine once per month?

For me, I would not give up the ocasional meal out and odd night in the pub, but I would not spend hundreds on clothes or holidays when that cash could pay off CC debt.

It is all about balance. Maybe the one good thing about debt is that it not having money makes you appreciate the little luxuries you can treat yourself to by savign up and not just the big luxuries.

loveGSDs

sickbean wrote: »

I suppose it's quite difficult to define essential too - my best friend is a bit odd in that he has no phone, no TV, no cooker, no shower, no carpets, no furniture for the most part (I could go on).

He makes more money than me so could easily afford any of them, but when I ask him why he says he just doesn't care about any of them.

But then he will go out and spend £7000 (cash) on a new watch.

Like I said, weird bloke.

lol, he does sound odd.

im desperately trying to save for a deposit so i can move, and for the past year iv been thinking 'do i really need that or will i add the money to the savings', its stough call but i find if i stop and think about it, it often puts me off buying the item.

problem for me just now is - live in a house i hate but spend money on it to make it more livable, or hate it even more and save more for moving?? :mad:

saorsie

Tis indeed a good question sickbean with no easy answer :cool:

I think it's all a question of balance. Yes you are quite correct in your thinking that the extra £50 that you are spending on a meal out with family to celebrate a birthday for example, could be better put towards mortgage payments, however a lot of people are looking at debt- free journeys of several years and it's unrealistic to think that you would be able to deprive yourself of any niceities for that length of time ~ that is guaranteed to make you fall off the wagon and have a spending splurge which would be far more dangerous to the debt busting as it is unplanned. :eek:

I believe that the not for profit firms like CCCS allow you to budget in money for things like holidays, entertainment, clothing etc within your income/expenditure sheet within set guidelines. (unlike certain DCA's who believe that whilst you are in debt you should live on bread and water and dressed in rags )

I personally think the best way is to allow a small amount of money within your budget for these 'luxury' items but only spend it if you really 'need' to ie you need a new pair of shoes because all your others are beyond repair. Then provided that's it's budgeted for and it's the cheapest you can possibly get and it's not plunging you further into debt then go for it and enjoy.

In essence better to have some monies put aside for these things than whack 'em on an already exhausted CC

-s-

an9i77

Those with debts who spend money on luxuries ( I used to be one of them before discovering MSE) will get their comeuppance as it will just take a lot longer for the debt to clear (if ever) and they will end up raking out a fortune in interest. So I think it is a personal, rather than a moral choice, as they will be the ones paying for it in the long run.

GeorgeUK

People have very different ideas of what luxuries are.

Some people go bankrupt while still living in a big house with a flash car and designer clothes in the wardrobe. Others think of luxuries as the occasional bottle of wine - others an overseas holiday.

It is a question of lifestyle that was previously enjoyed. As they are in debt, that lifestyle was paid for by someone else. In my opinion, they should not enjoy that same type of lifestyle but can have the occasional luxury that was part of it before. And by that i mean something cheap or a treat every other month (spa day)

serious_saver

It depends on the individual situation. If it is the occasional 'luxury' then I think it's ok. The problem comes when these luxuries stop being occasional highlights and become 'your basics'.

If you stop spending on everything except for the basics there is a risk that you don't have anything to look forward to. I've done 'living on the basics' and it's not pleasant. The real trick is to budget for an occasional luxury and not go over it.

There's also a great variation in what people consider to be essential.

dreamdreamer

I think saorsie put it perfectly - if your debt free journey is going to be some years, making yourself and your family deprived and miserable to put everything towards debt is not viable, you're going to fall off the wagon. At the end of the day you only get one life, you should enjoy it WITHIN REASON. I think any spending on credit while you're paying off debts should be a no-no, but as long as you're servicing your debts on time, then how long you take to pay them off is entirely up to the individual.

I have debts (as per signature!) but we still have little treats. I've sacrificed the big things like holidays, cars etc (I cycle everywhere now!) to my debts but without the little things like a bottle of wine sometimes, a trip to the cinema, lunch with the girls, I'd go bonkers!!