How common is my situation?

Terryschocorange

So I am finally here it after spending months of pondering whether to join up.

I am currently in a bit of a pickle with my finances. 3-4 years of overspending and bad decisions has left me 22K in debt on a salary of 33K a year. I am 30 years old and live with my partner although he is not involved in my debts and I want to keep it that way. He knows I am in debt and that it is significant but I don't want to discuss amounts.

I have read somewhere that the average debt is 8K per person. This makes me shudder as I owe almost 3x that amount! How common is my level of debt - £22K ?? I don''t really have anyone to talk to about it so I don't know how to gauge how bad my situation is.

One of my close friends does know and they have said that 20K debt is quite common but I can't get past the feeling of total shame.

sourcrates

Hi,

Welcome to MSE !!

If you look at a few of the forum members signatures, you will see you are far from unique.
There are many people on here with a lot of debt, of course it's all relative to your earnings.

What is your reason for joining today ?

Are you looking for specific advice on how to deal with your debts, or just want to gauge others opinions ?

bearcat16

In my opinion, it really depends on what that debt is.

If you had £24k of debt because you bought a £24k car and still have it, well most would think that's OK as you have an expensive asset to show for your debt.

However you say "years of overspending and bad decisions" would, I expect, mean credit card debt and possibly a consolidation loan?

But to your original question, how common, I think it is VERY common. Most people I know are in debt through living beyond their means for years, going on holidays they can't afford, buying nice cars without thinking about the depreciation or the interest (only about the "affordable monthly payment")

One friend bought a new MacBook recently after his missus had gone on about it for ages. I asked (politely) if he could afford it and he confided that he actually had no clue if they could afford it or not.

He said it will just add about £50 to their credit card minimum repayments, and he was sort of sure that would be OK. I asked him if he knew how much they had spare each month after rent and bills etc, he said "nothing, we never have spare money"

I believe it is this kind of thing that leads people slowly into large debt. Not 'living the high life' or spending like crazy, just being financially disorganised, and getting a little bit further into debt every month.

I asked him why he didn't out his CC debt onto a 0% deal for 3 years or so, and he was just baffled by the whole thing.

The fact is, looking after your finances is not easy. It's a skill that has to be learned, and there isn't really anyone (other than perhaps parents) to teach us. You don't end up in a good financial position by accident, it's by careful planning and requires a good understanding of how financial products work.

Most people find that mind-numbingly boring, and that leads to complacency which usually leads to debt.

So in my opinion, very common.

Sanctioned_Parts_List

I don't think it does any good to compare the size of one's debt. There are people on here who have paid back over £50k in months, and others struggling for years to pay back a tenth that, depending on their particular circumstances.

The way to gauge how bad your situation is, is to look at your individual circumstances. Income vs. expenditure. That's where the tools and ideas on this board come in handy.

Even if you're doing quite comfortably, there is still a lot to be gained from doing a Statement of Accounts, even if in private, just for yourself. They almost never fail to throw up a few surprises.

DebtSlave

Hi, I had 22k of debt on 15k per year (including all the late fees, charges for being over limit etc). It has taken me almost 8 years to pay it back whereas someone on much better income could probably have paid it back in a couple of years. The main thing is you deal with it before it gets out of control (unlike me!).

CalumHeath

Don't worry about averages. If you divided all the legs in the world by the number of people, everyone would have less than two legs - on average.

You haven't asked for any particular advice but if you need any just shout up - the people on these forums have a lot of experience.

Baby_Angel

I currently have about 19k debt reduced from 29k at the start of 2015. Like bearcat said it is a boring chore albeit a very important one to organise your finances. Fortunately for us it wasn't reckless spending. We spent it on the house and renovation. We are careful with our finances and realistic on what we can afford. We are also lucky enough to earn more than double the debt we have currently. I have a SOA for me privately and it is nice to see the figures when you make progress. There are lots of tips and you can pick up ideas from the experts on this forum. Slow and steady has been my motto to keep a good balance in life and debt.

debbie_debt

Like people have already said, everyone's is different. An average debt of £8k simply means that 50% of the population will have below that level of debt and 50% will have above it. I'm sure we'd all like to be in the 50% that have less, but then the average would simply change :rotfl:

What I'm trying to say is that you are not unusual at all. We're battling to pay off £37k in debt on an income of £54k. Thankfully, we've a £20k windfall coming this month which will go straight onto the debts (no matter how much I want to go on holiday) but you will hear of many people on these boards who have worked their way out of much more debt than you. If you want to tackle it, you can. Start today. Be motivated. Learn as much as you can from this site and start paying it off immediately - no matter how small the payment is.

Good luck on your new journey :beer:

Debbie

Terryschocorange

Thank you for all of the replies. It's much appreciated.I am going to to do a SOA at some point over the next few days when I can sit down and concentrate on it.

I think that my main reason for posting was just to get peoples opinion on my situation. It's inspiring to hear of people who have paid back their debts and it gives me hope that I can do it too.

My debts were accrued through throughtless spending, for example I would agree to go on holiday and would have good intentions of saving up to pay for it. The holiday savings would then be spent on other things and I would end up putting hte holiday balance on a credit cards with good intentions to pay it off over so many months... the money would then be used for other things....do you see the pattern! There are no excuses for my debts. I earn enough to pay my bills, live and have a few treats . I just need to sort this out and then press the reset button on my shambolic spending habits.

tiger_eyes

Terryschocorange wrote: »

3-4 years of overspending and bad decisions has left me 22K in debt on a salary of 33K a year. [...] How common is my level of debt - £22K ?? I don''t really have anyone to talk to about it so I don't know how to gauge how bad my situation is.

I think ratio of debt to income is perhaps a more significant factor than the actual amount of debt, particularly at lower income levels. Yours is a heavy debt burden - but still fixable if you can get on top of it.

matchboxfull

bearcat16 wrote: »

<snip>
The fact is, looking after your finances is not easy. It's a skill that has to be learned, and there isn't really anyone (other than perhaps parents) to teach us. You don't end up in a good financial position by accident, it's by careful planning and requires a good understanding of how financial products work.

Most people find that mind-numbingly boring, and that leads to complacency which usually leads to debt.

So in my opinion, very common.

This is wisdom. :T