Who has INCOME over 40K and is still in serious Debt????

peteuk

We were happy getting everything on credit! Until a large Sofa company sold us a kipper. Took out a buy now, pay later deal but the payments were over 6 months. We were advised we could change this when the payments start! WRONG

This just happened to tie in with the birth of our second child! So with everything else we pulled the switch. Although I earn ove 40K (now) back then it was approx 30K but over 40K with the wifes income.

I have a very stable job, but do move around so the wife doesnt have the stability. She is currently unemployed as we have just moved again.

We have been on a DMP for 8 years now and are down to our last two debts (both bank loans) so it is working out....just taking time but the one think that became clear is that we could not continue living like we were. Hopefully we can install this into our children so that they dont have the same problem.

stitching_witch

michaels wrote: »

Surely everyone should be 'saving' 25% of their income to pay for their retirement by what ever means (pension, isa, mortgage capital payments)?

That's a sweeping statement!!

My take-home pay plus small occupational pension amounts to £815 per month, 25% of which is £203.

I'm sorry, but no amount of frugality will enable me to live on £612 per month when my rent and council tax alone amount to £470 per month. I do pay 5% of my salary into a pension and matched by my employer and long for the day I can afford more.

John1993_2

asmwp wrote: »

To be honest, in my opinion, everyone will live UPTO their income

Well, we are maybe all tempted to, but I've generally managed to avoid the temptation, and have put a decent fraction of my income into savings every year that I've been in my current career.

This forms the basis of the advice I give to everyone who's asked; at the start of your career, when payrises tend to come reasonably frequently, don't start spending all of the extra. Take a fraction of this new money and divert it to long-term savings.

It can make a massive difference in times of trouble.

dreamdreamer

Originally Posted by michaels
Surely everyone should be 'saving' 25% of their income to pay for their retirement by what ever means (pension, isa, mortgage capital payments)?

That's a sweeping statement!!

Quite. My tax-exempt pension contribution is 6.8% of my wage (+ employer contribution) and, provided the mortgage is paid off (which it will be) it will enable me to live quite comfortably.

Back to the topic at hand - there are some people who get into debt because their income is simply too low. "Too low" is obviously subject to individual circumstances. However I think most of us get into debt because we overspend, don't budget, or don't save for those "one-off" bills or emergencies. All of those things are more than possible on ANY income, and perhaps actually more likely on moderate (which is what I would consider £40k - you're certainly not loaded on that anymore) incomes because you think "I earn a good wage. I can afford it" and don't pay enough attention to the big picture and your budget like you perhaps would if you needed every penny for your bills and food.

We earn about £75k between us, no kids etc. We do fine, put money away, overpay the mortgage, have a nice holiday once every 12-18mths etc, but only because of my debt history and subsequent obsession with budgeting and frugality. I know lots of people on similar wages who run 2 new cars, have a mortgage £100k more than ours, go on 3 holidays a year etc, and I know full well it's going on credit.

The long and short of it is, if you don't spend within your means, whatever they may be, sooner or later you're going to find yourself in debt.