Just how rife is unsecured debt?

jonnybeegood

tiger_eyes wrote: »

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.

Thanks Tigereyes, I know that we are very fortunate in that we have a decent income. Thankfully we have seen the error of our ways and we are now trying to pay this debt off asap!

Sanctioned_Parts_List

Lovely post Smodlet :rotfl:

Smodlet wrote: »

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.

Ha, I blame the parents! And probably the grandparents, too. Anyone, in fact, who has ever encouraged their children to "save up to buy a toy" instead of "save up to make sure you never have to miss your child's sports day because some cretin called a 'power meeting' at five-to-vanish"

Smodlet wrote: »

Try, if you can, to imagine a world without credit:

Noooo! What will that do to my P2P investments? Do you know how hard it is to get 6% on cash in this day and age? You monster!

Smodlet wrote: »

If someone in my circumstances can still make savings, how many more must be accessible to those on £40+k?

Very, thanks for asking!

Smodlet wrote: »

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.

I hear Siberia's very nice at this time of year. Though where I am at the moment it gets down to 30C at midnight, so do stop complaining about such mild weather, there's a chap!

Smodlet

So where the hell are you, then, actully in hell? I won't say you belong there, not my call.

takman

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!!!!

I wouldn't worry about how common being in debt is or how many people are in your situation. None of that matters!.

You should be worried and very concerned that you are in such a large amount of debt when you have a salary that is much higher than average!. You are obviously spending way above what you earn!.

So the only way to feel better about yourself is to really start paying down those debts and then once it's paid off continue to save that money!.

tori.k

A huge issue is the banks are still irresponsible lending everyone of our cards has had the limit raised way over our earnings that would make bankruptcy the only real option if we were to max them out ( not that we would and dropping the limits is on my to-do list)

Smodlet

Credit limits are not there to be spent unless we choose. It is not the banks' responsibility, it is ours.

takman

tori.k wrote: »

A huge issue is the banks are still irresponsible lending everyone of our cards has had the limit raised way over our earnings that would make bankruptcy the only real option if we were to max them out ( not that we would and dropping the limits is on my to-do list)

That is really the wrong attitude to have and people who blame it on the banks are usually the ones who easily end up in large amounts of debt.
If you feel that you can't resist spend right up to your limit you should tell your bank this and they will more than happily lower it for you!.

People need to take responsibility for what they borrow and having the banks impose even more restrictions on lending does not solve the problem of people not being able to manage money properly.

enthusiasticsaver

I think the amount of unsecured debt people have is down to attitude to debt rather than income. I have never had unsecured debt beyond interest free HP mainly down firstly to my dad who worked his way up from clerk to company chairman over 30 years and had massive aversion to debt which he passed on to me and I in turn have passed on to my now adult daughters. I worked as an arrears counsellor in the 90s and apart from those who were sick or going through divorce the main reasons for large unsecured debt were an acceptance that debt is part of everyday life, a reluctance to wait and save for things they wanted and a complete lack of budgeting common sense.

You have found out now how easy it is to get into debt. Well done on tackling it now but please pass money managing lessons on to your children so they don't make the same mistakes.

enthusiasticsaver

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!!!!

The amount is higher than average but as a proportion of your income it is not unusual. You are in the fortunate position of being able to pay it down from a higher than average wage. Just consider two things. Firstly how much interest are you paying on this debt and have you paid over the last 10 years or so and also how secure is your job.

No point in looking back. Just learn the lesson, deal with the debt and move on. You won't be the first or last one to have that amount and once cleared use the financial discipline you have gained to save and invest in your pension. Good luck.

theoretica

jonnybeegood wrote: »

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!

Would you know? Do your friends and family know about yours?

I suspect the not talking about money has extended in some families to not even talking about it with the kids, which is a great pity. It isn't protecting them to stop them from learning from your mistakes or expertise.