is manageable debt ok?

bezza59

Hello everyone!

Me and my wife are currently in disagreement over our situation. We are mid 40's, 2 kids and a dog!

Our debts peaked about 18 months ago an we up in the 50K's and that wasn't including the lease car! We made a commitment to sort it out, restructured the debts and sorted out our excessive spending. We current owe around 40K. The debts are all at low interest rates and we easily afford the repayments. Each month the balance gets lower and we have not used any form of credit since starting our new regime.

My wife still lives in a sense of shame over our situation... I dont!!!. It's beginning to cause arguments. As far as I am concerned; we do have a lot of debt, however it's managed, affordable and reducing month by month. We are never short of money for the essentials and life is fine. We earn decent money ( about 65k joint). I am actually quite proud that we are dealing with our debts.

As far as I am concerned, the amount of debt is not the main issue- it's the ability to manage it and pay it back. I know people who earn 20K a year but owe 30K and struggle to make inroads. To me, they are in a far worse situation than we are. And then there are people on minimum wage who owe 5k on payday loans and have no money left to live on - much less than us but a far worse scenario in my opinion.

I am I being deluded? I am not making light of our debt, but I just can't get too worked up over it as it's being dealt with!!

T9090H

All debt is in ratio to income and and how much you repay each month. If you have enough to pay for the essentials in life, can meet the minimum repayments and be able to spend a little aswell then I agree you are not in a bad position even though your level of debt is higher. Good luck and keep working to lower your debt.

angelpye

I guess in that equation somewhere needs to be if your income for whatever reason reduced would the debt cause a financial crisis? Could you loose your home? Someone on here said that being in debt is borrowing from your future self but it is also gambling that your future self will still be able to pay it back. I think its great you feel positive but I think its also fine that your wife is concerned...we all deal with this differently.

binaryuniverse

My old debts were caused by me using up credit cards, whilst not having any savings to pay them off. Whilst a silly idea, I was on minimum wage which, in 2009, was just about enough to survive on, but not much wiggle room for anything else. The rises in the amount you can earn before being taxed possibly helps a little, these days, but I imagine it's still not much fun. I was just about able to pay off the minimum, per month, but it was a fine tightrope, which snapped when I lost my job.

Fast forward to 2017, and whilst my debt is rising again, is all at 0% and I am putting away more in savings than I am adding to the debt pile. So I'm maximising my interest returns and, should I need to, can instantly pay off the debt

So it's a very different kind of debt. And very much manageable, compared with where I was 8 years ago. In fact, it is making *me* money. So it is very much okay, from my point of view.

It also helps that I don't have much in the way of compulsive urges to spend or gamble. If I want to buy something I'll often weigh up whether I need it or not. Often for several weeks. By then I've usually decided I actually didn't need it.

But I never want to be in a position again where I have debt that I can't back up with available cash. Apart from a mortgage. But, like a student loan, that's a different kettle of fish.

Karonher

Could you pay off the debt and live comfortably if one of you lost your job?

tallyhoh

While they are low interest rates they are still costing you money. why bother having debt if you have such a good income? What happens if you lose your income. Cut down on expenditure & pay your debts off ASAP

bezza59

Thanks for all of the replies. I probably didn't give enough info earlier. We are both totally committed to clearing the debts. We pay 600-700 above the minimums each month to get it cleared in about 3 years. I am looking forward to having no debt, however I am not worried, stressed or concerned about it whatsoever. I would only be worried if we were not able to service it, or if we were accruing awful interest charges etc.

It's true that a job loss would cause us some problems, not only with the unsecured debt, but also for the mortgage etc. This is a reason why I will be glad when it is paid off. I am still not getting stressed though

copperman05

All debt for me bar perhaps a mortgage is bad. You may think they are manageable but how much better off would you be without the payments? As said do you have enough money saved should one of you lose your job?
For me debt is like a disease that you need to fight with every ounce of effort that you can, its like a ball and chain holding you back from what you could really achieve.
So instead of being in debt you could be investing more for your retirement, going on more holidays, or owning your car outright, paying NO interest. Its about getting you money to work for YOU not your money working for others... So yes all debt is bad debt and the quicker you get out of it the better...

bezza59

copperman05 wrote: »

All debt for me bar perhaps a mortgage is bad. You may think they are manageable but how much better off would you be without the payments? As said do you have enough money saved should one of you lose your job?
For me debt is like a disease that you need to fight with every ounce of effort that you can, its like a ball and chain holding you back from what you could really achieve.
So instead of being in debt you could be investing more for your retirement, going on more holidays, or owning your car outright, paying NO interest. Its about getting you money to work for YOU not your money working for others... So yes all debt is bad debt and the quicker you get out of it the better...

Hi,I totally agree that we will be much better off when it is all sorted, however at the moment the debt exists and and we have to service it. We still manage to have holidays and the odd meal out. Life is generally good and I don't feel stressed or worried about it. Life is too short!

laurenh1

I think this is such a personal thing. I know people who think they dont have problem debt if they're able to make minimum payments on things for me I would be so worried with any form of non mortgage debt I couldn't repay at the end of the month. I would even be uncomfortable getting a car on finance because things can change and I've been made redundant twice which left me struggling with debt I though was in hand so I steer clear now. That's not to say whose right or wrong it's just what you're happy with and comfortable with your wife might be more of a worrier. My hustand wouldnt be worried eother! !

copperman05

I suspect your OH is concerned that if your not dedicated enough to getting yourself out of debt as she might like, fearing that you may never get out of it. Those that tend to pay off debt halfheartedly tend to get halfhearted results. Why are you going on holiday if you have debts? Why make yourself poorer when you could be much better off much quicker if you really attack it?
Why don't you use something like undebt.it, enter your debts and see how quickly you could pay it off compared to what you are paying now.