Drowning in debt.. or are we all?

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Agree wholeheartedly with the comments above. It does just take one thing that throws everything out. We had a cowboy builder so had to hire another roofer to take down the shoddy work and redo... at double the cost as we couldn't get any money out of the cowboy. Meant a very tight few months.

Paying interest only is a horrible feeling, for me personally. We don't do this but have done in the past.

quantic

I think it depends really - you can't make an assessment until you have a full picture of job security, salary, savings and assets.

I guess it depends on how comfortable you are with debt, how manageable it actually is and the risks involved.

I tend to air on the side of caution. I personally don't even like having a mobile phone contract never mind debt these days.

Other than the affordability aspects of debt, I just find that we have enough to think about in modern life with day to day bills so debt is an unwelcome worry in my mind.

National_Debtline

Kate_fixing_it wrote: »

One persons ocean is another person's puddle.

Kate x

Hi Kate,

That's a great phrase, and it's very true.

I've spoken to callers who have been beside themselves becuase they haven't been able to pay a £100 bill. At the other end of the spectrum, I've spoken to people that owe a six figure sum on credit cards and have been absolutely cool about it. Debt is not a bad thing per se, what causes the key issues is when that debt becomes unmanageable. This is usually caused by a significant change in circumstances - such as loss of job, relationship breakdown, having children, illness or retirement.

Rather than consider the amount of debt compared to income, it's probably better to look at how much 'surplus' money someone has to meet their liabilities.

Very best wishes,

David @ NDL.

worriedwilf

I owed 30K ish on a salary of 50K. Fortunately I am able to get 0% rates or low rates and the rest is a loan that is reasonable at 7% so my debt drops by over £1000 each month.


It's not ideal and I can't wait to be free of it but I don't think I am drowning as I pay everything on time, bring my debt down and have enough left to live comfortably.


Things would be different if I lost my job which I why I am paying it off quickly.


WW

sistafromanothermista

woodformoretrees wrote: »

I think it's completely dependent on the % of your monthly wage that's getting eaten up by repayments. Some people would be drowning with a 10k debt, others are just floating by on a lilo.

:T:T
I love this analogy :cool:

For us 20k debt was our going under point. However, we have thrown everything at it. On the other hand my sister owes around £600 and this is her drowning point.
The important thing is that the debts are being managed and snowballed effectively and that the figure is going in the right direction.
As with anything, you have to get into the right frame of mind and be aware that times will be hard until the debt is gone.

Giraffeseeker

I was drowning at £43.5k. Went on a DMP and now at £27k I probably could go back on regular minimum payments and manage fine. But I won't, because I am hardly paying any interest on the DMP.

Happier_Me

For most, this will depend on your circumstances but I think your upbringing has a part to play too.

My parents had me in their teens - money was very, very tight. They have done well for themselves over the years but this has definitely shaped my attitude to money.

I am 39 now, married, two kids. I've had interest free credit card debt for most of my life as well as the odd low interest rate loan. At its highest I would say our unsecured debts were around £14k. This was perfectly manageable financially on our salary. But I would say that debt has a negative affect on my mental health and this was my (final) turning point.

The first time I became completely debt free (including mortgage) was at 32. We are around two years away from achieving this again following a house move. We currently have no credit card debt. I won't be moving house again.

But there is one debt I am comfortable with having and will be happy to have for the foreseeable future, assuming our circumstances don't change. That's a car loan (PPC?!agreement). We owe around £30k on a new car. Our (my DH's!) main luxury is a car and we have had such bad luck with second hand models that we bought new last year... and for us its great. I treat this monthly cost like a lease - the monthly cost of drivng round in a car that is relatively cheap to run and isn't in the garage for £XXX's of repairs every two minutes. Strangely enough if we had done this three years ago, it would have saved us a fortune.

view

Reading above it's probably down to perception. If someone is paying out pretty much everything to debt/s however other bills are being paid then maybe it doesn't "feel" like drowning. Perhaps if only bills/debts can't be met then the drowing feeling starts...

Bublin1

For me, being in debt has never felt like drowning. I would describe it more like being stuck in mud. I can easily make the minimum payments and live nicely but once I had my LBM I realised it was making my life static. Without the loan I could save up cash for the big ticket things I want. I could take my kids on holiday. I could save up loads of cash. I could make extra payments on my mortgage.
This is why I'm now wanting to pay it off with gazelle-like speed. I can see a better/more secure future without debt.

katejo

jackieblack wrote: »

So true.

For me, any money paid in interest is money wasted.
I accept that we need a mortgage in order to buy a home, but still dislike this.
Other than our mortgage the only debt we have is on a 0% cc with the equivalent amount (to the penny) in a savings account ready to pay it off at the end of the 0% period, but I still struggle with this. My head knows it's financially benefitting us, but my heart just wants the debt gone

My attitude is exactly the same. Have never had any debt other than the mortgage . I use occasional interest free credit card deals to avoid using my emergency funds. However it does seem to take so long to build up an emergency fund particularly now when interest rates are so poor. Each time I reach my target, an unplanned expense comes along and I have to start again !
If I had debt of any size, I would have to pay it off before spending any money on non essentials.