Debt blights younger generations

Percy1983

I will say as one of those people who went to the edge of debts and back again I can see the problems.

I will admit there is 2 elements to the debts I ran up, yes by definition I was living beyond my means but this was more a case of my means being so low.

I say this as I was on an apprenticeship and really earning very low amounts of money in my early years and it was only by the age of 20 I had something reasonable (basically minimum wage) yet really needed to drive as day release for college was no longer an option. Now I saved and bought my first car for £1000 (1.1 Fiesta Mistral) and then had to pay another £1500 to insure it, which yet again pushed my finances over the edge. Now I will be honest it was at that point I just looked at the situation and decided to live now and pay later to which credit did fund me and extra few grand every year which I did spend to go out and have fun (in short enjoy life while I was young) I wouldn't say I pushed it too hard as I had a cheap mobile one drank in the cheaper bars etc.

As it is my income crept up and by 23 (approx) I was living within my means but had no real surplus or emgencey funds as such. By this point my little fiesta was nearly dead so another £1200 was put into a car (yep on credit).

I will say by 25 income was up and I was starting to clear debts down all was well and after another car failure I decided to buy a newer car and spent £6.5k on a Citroen C2 with 12k miles on it bumping the debt figure nicely and that is still my car now and it its only got 26k mileage and has never had a issue with MOTs etc just new tyres.

Fast forward a few more years and and the debts are gone and we are savings (see below), I will say there is the addition of a fiancee in there but thats another story.

But I guess if my income didn't keep moving up it would be a rather different story or any periods of unemployment would have caused problems I guess.

I guess on reflection it would have been nice to have not had the debts and such be buying a house sooner but on the flip side I don't regret it as it would have meant having a lot less interesting life 16-24.

Here is a good sum, in the time it has took me to clear debts and as such delayed me buying a house the type of house I want has dropped £37k (on average of course) and in that time I peaked at £22k in debts. So yes while paying back £22k I have saved £37k, more luck than planning I agree and with that I do actually have things to show for the money paid back too (Car, TV, PC etc).

ukcarper

Percy1983 wrote: »

I will say as one of those people who went to the edge of debts and back again I can see the problems.

I will admit there is 2 elements to the debts I ran up, yes by definition I was living beyond my means but this was more a case of my means being so low.

I say this as I was on an apprenticeship and really earning very low amounts of money in my early years and it was only by the age of 20 I had something reasonable (basically minimum wage) yet really needed to drive as day release for college was no longer an option. Now I saved and bought my first car for £1000 (1.1 Fiesta Mistral) and then had to pay another £1500 to insure it, which yet again pushed my finances over the edge. Now I will be honest it was at that point I just looked at the situation and decided to live now and pay later to which credit did fund me and extra few grand every year which I did spend to go out and have fun (in short enjoy life while I was young) I wouldn't say I pushed it too hard as I had a cheap mobile one drank in the cheaper bars etc.

As it is my income crept up and by 23 (approx) I was living within my means but had no real surplus or emgencey funds as such. By this point my little fiesta was nearly dead so another £1200 was put into a car (yep on credit).

I will say by 25 income was up and I was starting to clear debts down all was well and after another car failure I decided to buy a newer car and spent £6.5k on a Citroen C2 with 12k miles on it bumping the debt figure nicely and that is still my car now and it its only got 26k mileage and has never had a issue with MOTs etc just new tyres.

Fast forward a few more years and and the debts are gone and we are savings (see below), I will say there is the addition of a fiancee in there but thats another story.

But I guess if my income didn't keep moving up it would be a rather different story or any periods of unemployment would have caused problems I guess.

I guess on reflection it would have been nice to have not had the debts and such be buying a house sooner but on the flip side I don't regret it as it would have meant having a lot less interesting life 16-24.

Here is a good sum, in the time it has took me to clear debts and as such delayed me buying a house the type of house I want has dropped £37k (on average of course) and in that time I peaked at £22k in debts. So yes while paying back £22k I have saved £37k, more luck than planning I agree and with that I do actually have things to show for the money paid back too (Car, TV, PC etc).

I think this illustrates the problem when I was young I was in a similar position to you and did by a cheap car on credit. But that was it there was no credit available for other things so if you couldn’t afford it you didn’t have it.

Percy1983

ukcarper wrote: »

I think this illustrates the problem when I was young I was in a similar position to you and did by a cheap car on credit. But that was it there was no credit available for other things so if you couldn’t afford it you didn’t have it.

I guess half the problem was temptation, I got the credit on a very low income which in many respects was fine as I did have a long term plan which made sense (and has worked). But while I had that plan they could be someone working in a low paid job without the same career plan and rising income which could have ran up the same debts quite easily.

With that I didn't take all the credit available to me either.

SingleSue

Going4TheDream wrote: »

Dare I say that is because they 'want it now' and pay for it later?

My first car was an old yellow mini I paid £750 for it when I was 22, I never owned a brand new car until last year aged 46 and I paid cash for it (was only a cheap city car btw) In between my 1st and last car I paid cash, saving a bit each month until I could afford a bit of a better/newer car.

My daughters first car was a 3 year old Fiesta aged 18, replaced the following year by a brand new Renault? She financed both......

My first car was £150 from an auction when I was nearly 21...my last car was £461 from Ebay (4 years ago now)

We've never taken finance to buy a car or used a credit card to pay for a holiday or taken out a loan to pay for our wedding. We only ever bought what we could afford to pay cash for.

We started our life together with a donated sofa, bed, wardrobes, table and chairs and picked up an armchair from the local tip. My first brand new sofa was 15 years after leaving home (paid in cash), I have never had a brand new kitchen (my last kitchen cost £50 from the local paper - that was 13 years ago) and we went camping for our holidays at one of the cheapest sites in the uk (£1 a night in our early days - my parents gave me their old 6 berth tent for my 18th birthday)

We went through the years when money was short on the ground, when our diet consisted mainly of a bag of potatoes a week cooked in all different ways and the occasional bit of steak (which was surprisngly quite cheap back then) and I became known as the Budget Queen for playing one shop off against another to get discounts or extras thrown in when we were purchasing bigger items, such as a cooker or washing machine (our local Currys would get nervous when I turned up, they knew I was neither stupid nor a shrinking violet)

It used to annoy now ex hubby though, he was and is quite materialistic and he found it quite restricting, he would have been perfectly happy to have blown his salary on all manner of non essential items, something he actually did just after I had eldest when money put aside for the TV license was spent on a game for his Mega Drive (I controlled the family finances after that, he challenged me to do better so I did). Within a year of us splitting, he had taken loans etc amounting to over 20k, partly to cover his wedding to his new wife and partly to enjoy life.

My boys also know it is better to save and buy within your means than to take credit...over the last few years, eldest has saved and purchased an Xbox, a bike and an Ipod, middle son a Wii and a guitar (and is now saving towards a better guitar) and youngest has saved for an Ipod 2nd gen (2nd hand), was saving for an Ipad but has just upgraded to a new Ipod 4th Gen. They had no parental help, they did odd jobs for neighbours ~(in eldest's case, he put by his part time earnings) and in some cases, sold items to boost their savings, put by Christmas and birthday money, some of the items they had to save for over a year before they could purchase,

Percy1983

From single Sues post that is the direction my life is heading, I did the credit thing and learnt a lot. The only credit I plan to use in the future is a mortgage and a sofa (interest free of course).

With that I am not against credit, ie buying something you want in a sale on credit can be cheaper than waiting until you have the money and its back up in price, with that anything to go on my credit card in the future will have a plan for paying it back within a short time frame.

But I will say credit was given out too easily and in reality they shouldn't have given me what they did, I could (and did) cope and paid it all back but there is many more who couldn't cope.

I guess I look at my parents situation and don't want to be there, after 25 years of paying a mortgage its more than it started at.