hate it when people are shocked

Jagraf

Goldiegirl wrote: »

I worked in a mortgage department of a bank for many years, and saw people applying for remortgages, so they could add their unsecured debts to the mortgage.

I left this employment 5 years ago.

Up until the time I left, £20000 of unsecured debt was commonplace, £40000 was not unusual, and there were extreme cases where there was £100,000 of unsecured debt.

So the size of people's debt never shocks me, because I've seen it all before

This doesn't surprise me at all. People believe that their property is theirs, even with a huge mortgage, and just keep adding to it as though its a bottomless pit. I was guilty of doing this in the 1990s.

I have friends in their 50s who are doing it now.

Brightspark87

Hi, I understand that people can be judgemental. I had £15,000 of debt on a £35,000 salary. 42.86% of gross earnings. It had a huge effect on me, and my job prospects. Now its below £10,000 and 26.56% of my salary and I feel the burden far less.

Personally, I have seen people earning £500,000 who have defaulted. Not because they couldnt afford it but because they were working hard and moving house and forgot about a small debt.

I have felt so much warmth and support from this board and will continue to visit and help others too.

parsniphead

midlander81 wrote: »

Now that I am on top of our debts I feel happier being more open about owing money. Before I used to avoid debt conversations with colleagues etc for fear of judgement.


Got into a conversation yesterday about money with some workmates ( I should have known better) and admitted that we owed more than 40K at the start of our journey.


One of my colleagues said that she was shocked and that she had never known anyone with that sort of debt level.


I tried to explain that it is a lot but relatively it's payable ( we have a joint salary of almost 70K).


This got me thinking... is a 40K debt REALLY that unusual these days? I mean, we are normal people and we managed it! I know that debt is all relative but is 40K on a salary of 70K considered 'shocking'?

I was just reading through this thread and felt I needed to comment on your first line. I remember when you first posted on DFW and sounded so desperate. To read that line shows why this site is such a wonderful resource. Glad you are on top of the debt.

I would never be surprised by debts owed after spending years on here. I started with debts of approx £30000 with a salary of £22000. It was stupid but I'm human and humans can tend to be quite daft at times. It's nearly paid off now and I will do everything I can never to be in that position again.

Good to hear that you have it under control and will have it paid off relatively quickly.

quantic

Personally speaking I don't think there is a magic number for debt to earnings ratio. Its more about your spending habits, you could be on 100k and struggle to pay back 10k if your spending habits are poor.

I suppose it boils down to how you are most comfortable, some people have no problem buying things like cars on finance, using them for 3 years then renewing the contract and repeating. While more expensive at times it can be less hassle.

Others prefer to have minimal debt bar mortgage and saving up for items. I don't think there is anything wrong with having debt but for me I always think things are expensive enough without paying interest. Plus its always useful to have cash flow in case anything goes wrong or you lose your job. You may be able to make payments when you take out the finance but what about in 2 years time?

I think the same goes for what people say they can afford, some people define being able to afford something as just physically paying for something, but I personally say I can't afford things that in truth I could pay for but I deem too expensive and they wouldn't leave me enough cash to save.

Additionally, I think constantly chasing your tail can be quite exhausting, when all is said and done, nice things are a poor substitute for security and I get quite a bit of satisfaction from knowing on payday I am left with 60% of my wage to either spend or save.

Being able to experience more in life, going to places, holidays etc and paying for them before going so they're not tainted with the worry in the back of your mind. Having a closer connection with the things you buy rather than using credit and feeling detached can lead to poor choices as it doesn't feel like your money.

Ellieseleven

When we entered our DMP in July 2010 we had just shy of 45k debt. For approx. 25 years I had a variety of store cards, credit cards and a loan and was able to comfortably afford to pay the balances on our joint salaries of approx. 70k

We had about 100k credit available to us across a number of credit cards but I always placed a ceiling on the amount of credit that I would use and never went anywhere near the maximum's, then...

My OH was made redundant and went self-employed with a partner who after a few months dropped us right in it and we found ourselves in a spiral of debt, robbing Peter to pay Paul and all the while the credit cards were being used to get by. I knew what was happening but tried so hard to avoid going onto a DMP but in the end there was no choice.

I have seen far higher sums of debt on these forums and to me everything is relative. I avoided adding everything together but each time I used credit I felt sick knowing that all it was doing was causing more and more anxiety. It's been a hard lesson but it's been one that I have well and truly learnt!

Ellie

Dozey_crow

On a basic level I think it is easier to understand why people on a low income end up in debt as they don't have money available to replace or repair things or call with emergencies. Likewise debt following unexpected drops in income such as redundancy or illness are immediately understandable for many people. IMO it is harder to understand how people on high salaries and up with high levels of debt when no disasters occur.

I have read on here that there is more credit available but for me it is hard to understand why people would take it if it wasn't'needed' because of having a lot income and being able to afford things. I guess it is just an alien concept as I am in the camp that is credit adverse unless it is unavoidable.

In the back of my mind are two directors at a company I used to work for. One said to me "I know £100k a year seems a lot.. But....." I laughed and said that was because it is a lot of money but he was serious. The baliffs called often.. He had nothing to show for the salary or where the money went.. Rented terrace house, no car, second hand goods, no wife/kids..Nothing.
The second earns £6k a month and his wife earns £3k a month. They live in a 'normal'house (bought recently for £245k) minimum deposit put down. They have nice cars and reasonable holidays. Yet he posts on social media claiming to be broke and saying how hard it is. As the firm deals with disadvantaged people I find it a bit distasteful.

So I'm not judging anyone but can offer a perspective on why people find it shocking sometimes. I guess living within your means is essential regardless of earnings and there are times when people struggle

As an aside I admire people that hold their hands up, pay it back and change their ways no matter what they earn. The characters mentioned above are making a career out of trying to dodge it.. Which is a whole other story.

midlander81

Just sat and read through all of the new posts. I am amazed at the number of people who have posted on this thread. I have found it really useful. Hearing about others who are in a similar situation makes me feel less alone. Hearing about people who have been there and paid it off gives me hope and the more frugal ones of you give me something to aspire to when the debt is gone!


feeling very positive now and focussing on all of the good stuff that I have... great family, nice house, a good job I love and the joy of being a parent to the most amazing son. The debt needs to go asap but It will no longer control me or dominate my every waking thought.

quantic

One thing I can never understand is... Say someone has a series of unfortunate events which in turn lead to a reduced income - then the credit steps in to plug the hole left by missing income and before you know it you have a load of debt. This is perfectly understandable, but the amount of people I know who continue to live as they did before the redundancy or illness is crazy.

Yes the people I know were made redundant, happened to 3 couples we know, but they continued to buy themselves designer brands, days out at fancy places, holidays to long haul etc. They justified the spending to people (not that anyone even asked?) the holiday was because they had a rough year with the redundancies, and sure I agree they did deserve it in that respect but sometimes I feel people will justify anything to themselves.

I'm not being judgmental as quite frankly I couldn't careless what people choose to do, you have a limited number of days on the earth and if they choose to spend theirs like that and it makes them happy then who am I to judge. I just feel like if people forgot for a second what they supposedly deserve or feel entitled to they would be able to fix their problems a lot quicker.

Its difficult to explain but sometimes I feel like when someone (not everyone) gets a real excuse like redundancy, it gives them a blanket excuse to enter into debt without it looking as bad? So we have friends sitting telling us how hard they have it, and then I notice a mulberry bag on the floor, their kids wearing Nike trainers that cost more than mine...

quantic

midlander81 wrote: »

Just sat and read through all of the new posts. I am amazed at the number of people who have posted on this thread. I have found it really useful. Hearing about others who are in a similar situation makes me feel less alone. Hearing about people who have been there and paid it off gives me hope and the more frugal ones of you give me something to aspire to when the debt is gone!


feeling very positive now and focussing on all of the good stuff that I have... great family, nice house, a good job I love and the joy of being a parent to the most amazing son. The debt needs to go asap but It will no longer control me or dominate my every waking thought.

You seem to have a great attitude towards it now and as you say, try to focus on the good things in life. I dare say people would happily swap problems with you for a nice family, job they love and the rest..

sourcrates

quantic wrote: »

One thing I can never understand is... Say someone has a series of unfortunate events which in turn lead to a reduced income - then the credit steps in to plug the hole left by missing income and before you know it you have a load of debt. This is perfectly understandable, but the amount of people I know who continue to live as they did before the redundancy or illness is crazy.

Yes the people I know were made redundant, happened to 3 couples we know, but they continued to buy themselves designer brands, days out at fancy places, holidays to long haul etc. They justified the spending to people (not that anyone even asked?) the holiday was because they had a rough year with the redundancies, and sure I agree they did deserve it in that respect but sometimes I feel people will justify anything to themselves.

I'm not being judgmental as quite frankly I couldn't careless what people choose to do, you have a limited number of days on the earth and if they choose to spend theirs like that and it makes them happy then who am I to judge. I just feel like if people forgot for a second what they supposedly deserve or feel entitled to they would be able to fix their problems a lot quicker.

Its difficult to explain but sometimes I feel like when someone (not everyone) gets a real excuse like redundancy, it gives them a blanket excuse to enter into debt without it looking as bad? So we have friends sitting telling us how hard they have it, and then I notice a mulberry bag on the floor, their kids wearing Nike trainers that cost more than mine...

I have a neighbour like that, all designer clothes, two foreign holidays a year, two cars, new house, he only has a below average wage job, she works part time, yet they spend like there's no tomorrow, can only assume its all on credit :eek: