Just how rife is unsecured debt?

jonnybeegood

According to the news/media, unsecured debt is rife and on the increase and yet I feel so alone in my attempts to clear our debts. We currently have unsecured debts of over 40K, however after having our LBM we are now knocking off 1k a month.

Apparently for people in our category ( 30's with young children) the average debt is something like £18K. I can't think of anyone else within our friendship group or family who has debts like that, let alone high debts like ours!

Is unsecured debt really so common? If so then it must be the best kept secret!! For years I have felt ashamed of our debts thinking that we were part of a very small minority!

I know that debt is relative. We have a joint income of 75-80k per annum and debts of around£40K. Is our situation more common that I previously thought??

jonnybeegood

Thanks for reply. I am relatively new to this site and it has certainly been an eye opener for me!

We all tend to be so open about many aspects of our lives and yet debt must still be a major taboo. My own parents don't even know the extent of my debts, in fact I think that only my wife and I know the true extent!!

enjoyyourshoes

Just check out 'themoneycharity' website under statistics. You will be enlightened. Also look at this forum, most individuals hide debt from partners and also hide from family and friends. Maybe an option is to save for the items we need and not spend insytantaneously on items we want?

Sanctioned_Parts_List

jonnybeegood wrote: »

My own parents don't even know the extent of my debts, in fact I think that only my wife and I know the true extent!!

That's not so unusual. Lots on here don't tell their husband or wife, either.

andyfromotley

I think people generally fall into two camps, those who spend less than they earn and save, sometimes quite a lot and those who manage thier money badly and live on credit. The thing is that it can be very difficult to spot these two different types without looking at the books.

I have been surprised when i talk to my friends about finance as to which camp they fell into, some of the most apparently sensible were heavily in debt. But then og course there was my best mate who is very proud of the fact that he has no personal debt, but remortgages his house every coupe of years taking out the equity that had built up. Go figure?

Interestingly these two groups dont seem to be sorted by income, savers seem to be savers whatever thier income. (although tbf i know very few high earners, i guess if you have 6 figure salaries it becomes easier to be debt free? But until we become more open about it we shall alaways be guessing. A decent indicstor seems to me to ask how they paid for their car, people are often happy to say if and how they financed it, whereas they wouldnt tell how much they had on their cc's.

On the wider point of reserves and savings they huge elephant in the room is people with no or very little pension provision. That is truly terrifying.

EssexHebridean

As others have said - you just don't know what goes on in other people's lives. Ask a lot of people if they are in debt and they would say no, yet try asking whether they have credit cards, and whether those cards have a balance on them that is not cleared off monthly, the answer may be very different. A lot of people don't consider a CC to be "debt" if they can make the payments. A lot of people consider themselves to be "homeowners" when they have a mortgage - I view myself as a "home borrower" currently - that'll change when the mortgage has gone. Even things like loans for cars - they are such a way of life for so many people - it's just what they do, and therefore they don't see them as debts...

ReadingTim

I think people reckon they're fine as long as they can afford to meet their minimum monthly repayment, and some spend right up until they get to that point. It's only then - when more has to go out than comes in, do they think they might have a little bit of a problem. The reality is that they're in debt up to their eyeballs, and are about to drown.

DD265

I still feel like money on the whole is a taboo subject.

But also I think many of us are guilty of not paying much attention to how much money is in the bank (or left on the credit card) until it occurs to us that it's running low.

I'm not trying to make excuses but I was never taught to budget as a child. I didn't always get everything I wanted but I certainly got a lot and never went without. Dad was/is a high earner and he does live with a lot of debt. I take after him (although very much scaled down on the debt/earnings front) but the difference between us is when I come into a chunk of money, I'll pay down debt, whereas he'll get the next thing on his want list.

Even though I now have YNAB, I don't use it religiously before spending and I should. I also don't necessarily place enough importance on the fact that 0% debt is still debt, or the fact that the balance on the card is not actually my money in the first instance. I am not in any danger, but I'd much rather be debt free.

jonnybeegood

So are our 40K debts ( on a salary of 75-80K) not that uncommon? I suppose that I am trying to make myself feel better!!!!

tiger_eyes

jonnybeegood wrote: »

So are our 40K debts ( on a salary of 75-80K) not that uncommon? I suppose that I am trying to make myself feel better!!!!

Don't kick yourself too much. What's done is done. A lot of people are in debt to some degree - the difference is that most people are on a limited income and can't access that much borrowing. Your higher household income enabled you to rack up bigger debts, but it also means you can pay them down faster and move on to building up savings and investments in future. It isn't important how you ended up here - it only matters how you deal with it.

Smodlet

DD265 wrote: »

I still feel like money on the whole is a taboo subject.

But also I think many of us are guilty of not paying much attention to how much money is in the bank (or left on the credit card) until it occurs to us that it's running low.

I'm not trying to make excuses but I was never taught to budget as a child. I didn't always get everything I wanted but I certainly got a lot and never went without. Dad was/is a high earner and he does live with a lot of debt. I take after him (although very much scaled down on the debt/earnings front) but the difference between us is when I come into a chunk of money, I'll pay down debt, whereas he'll get the next thing on his want list.

Even though I now have YNAB, I don't use it religiously before spending and I should. I also don't necessarily place enough importance on the fact that 0% debt is still debt, or the fact that the balance on the card is not actually my money in the first instance. I am not in any danger, but I'd much rather be debt free.

I have quoted the above post as, imho, it sums up the best on this thread of what I consider the root problem. A generation, more than one in the case of this forumite's post, who complain about debt the way I, and those like-minded, complain about the weather. The difference is, you have a choice about whether to get into debt in the first place. Unless you are on first-name terms with Ming, the Merciless, you have no say in the weather.

It is simple: If you run out of milk, beer, designer bottled water or Montrachet, try to imagine what it would be like if you could not just go online and order more with your platinum credit cards! What if, once gone, it was gone until your next pay day? Try, if you can, to imagine a world without credit: If you cannot pay for it now, you can either save up by doing without until you can pay for it, or you can learn to do without it altogether. Once you have eaten your last Rolo/slice of smoked salmon/kilo of beluga caviar, you can't have any more until you have worked for another month! It's the same with money: Make the choice either to live within your means or to get into debt. How was that for a lesson?

It is your choice. If you don't like the ones you have made and you earn £40-£80k a year, make a different choice, !!!!!!! And, if it's not asking too much, spare a thought for those who made the wrong choice because they had no choice and have no choice but to be stuck with their bad choices. (No, not me, thank goodness and my own miserliness)

If someone in my circumstances can still make savings, how many more must be accessible to those on £40+k? Stop whining and looking for sympathy and get a bloody grip! Or go on your own sweet way and maybe, if you try hard enough, you too can end up in a depth of sshh even your salaries cannot get you out of. HTH.

Now, if some of you rich people could just bribe Ming to turn the heat down a bit, I'm sure we forelock-tugging peasants would be very grayteful, koind suurrrs.