is manageable debt ok?

bezza59

Jon_B wrote: »

Our household income is around £66k/annum and I'd be seriously worried if my debt was anywhere above half our annual income.

I think you're in denial.

Hi, Thanks for posting.

I don't think I am in denial. I know how much we owe and I am committed to paying it off. Of course, a job loss or drop in income would be an issue. This is why we are paying it off relatively quickly. I just don't feel dreadful about it. Yes, I wish that we had never gotten ourselves into this situation - it was totally avoidable and we just fell into the 'buy now pay later' trap. Lessons have been learnt! I don't see any benefit living with a sense of shame.

I actually feel quite proud that we are dealing with it now whilst it is still serviceable.

bezza59

copperman05 wrote: »

Does the 40k include your lease car? How much is that costing you? £40k at £700 a month takes best part of 5 years not 3, and thats not including interest.
When I started using YNAB and saw all my debts listed and the amounts in red it was quite an eye opener and illustrated just how silly I'd been. I promised myself I would get rid of it a soon as I could. Yes it does take some sacrifice but I've also found it a serious life lesson on how much we waste our good earned money and make others rich and ourselves poorer. I'm done with that now.
Imagine tying the purse strings a little (or a lot) for a while till you get this debt gone, then invest in your future, your kids university fund and perhaps later being mortgage free? Why not?

Hi Copperman,

no the lease car is separate. We are both ok with that and see it as an expense rather than a debt.

I think I was a bit vague in my earlier posts. We OVERPAY by £700 each month. our minimums are around £800 so we actually pay around £1500 each month. We have managed to structure the debt so that the majority is 0% or low interest so the majority of this payment comes off the balance. I think that this is fairly decent repayment to make each month. Just done some number crunching and 25K will be gone in 18 months, at the current rate of repayment.

We will definitely need a conversation about what to do with the extra money when the debts are gone. It is very likely that we will save a hefty sum for DD university, if she decides to go. We only have 7 years left on mortgage so perhaps we could clear that even more quickly.

bezza59

Number75 wrote: »

You don't really say what the issue is, though.
OK, you're both committed to paying off the debt and you've made a great start and have a solid plan - great!

You say you don't feel shame or want to self flagellate which implies that your wife does.

You haven't suggested that she wants to pay it off sooner.

I think what you have here is more of a relationship issue than a debt one.

It doesn't matter if you don't find it shameful - she does. You need to accept her feelings even if they are different to yours. I would be embarrassed and ashamed to admit to £50K debt on a £70K income - and I'd feel angry at myself for ever letting it get so bad. I'd feel relieved that I was tackling it, and that my partner wanted to as well. But I'd be worried about loss of income until it was paid off - and as I said, I'd feel embarrassed and angry with myself too.

What would REALLY anger me is my husband seeking strangers on the internet to agree with his view!

You just have different personalities on this - she's not wrong to feel how she does.

So first - acknowledge that for her!

Then talk about the debt repayments and check it's working for both of you. You don't have to give up every holiday for 3 years - but is that what she wants? Or does she just want to be heard and not shutdown when she wants to say "OMG I can't believe we did that!"?

I actually disagree that you have manageable debt. Because it's FOR NOW. To me, manageable debt is my car which is on a 0% credit card for 6 months until I get my work bonus, but I know I have the savings to cover it - I just decided not to deplete my emergency fund by £3K. But if I lost my job tomorrow, I could pay it off and still have 6 months outgoings saved. Usually I'd have waited on buying a car, but mine just had a major repair bill.

In your shoes, that level of debt would worry me, for the what-if factor.

Hi,

Thanks for replying.

I don't think I am 'seeking our strangers' - I am simply positing on a debt forum. I am not revealing our real names or details so I don't really see what the issue is. I haven't shown my wife my thread, but I could and I don't think it would be an issue.

You are right, we do have different personalities. In all honesty I would have been happy to pay it off more slowly over 5 or 6 years, but we compromised on £1500 per month.

I don't think that my wife wants us to anything particularly differently to what we already doing. This isn't something that we discuss or argue about on a daily basis, but it usually crops up around payday!

It's great that you have savings to back you up if things turned sour. We actually have about £13k saved in an ISA. We made the decision not to touch this. It was initially meant for Children's university costs. It is money that we inherited some years ago from a great uncle of mine. of course, it wouldn't cover our debts at the moment, however it would cover our mortgage for around 20 months if the worst did happen. For now, that is a good enough buffer for me.

lessonlearned

Everyone handles stress differently.

Obviously your wife is finding your financial situation more stressful than you do. This is probably linked to fear.

On a practical level - as a "just in case". Do you have income protection cover. This might give her a bit more piece of mind and ease the stress for her. That and your £13k which is a good buffer.

As for her feeling "shame". Again this is something that is also personal, linked to feelings of guilt and perceived "failure". A lot of that could be down to her upbringing.

In the grand scheme of things debt is nothing to be "ashamed" about - it's not a criminal offence for which we get flung into debtors prison. There are murderers, rapists and thieves out there. Falling into debt just doesn't compare.

Here's a little tale you might tell your wife to give her food for thought and maybe help her put things into perspective.

My husband and I were doing fine......until he got sick.

We racked up £30k of debt during his illness, just trying to survive.

He died.......I am now debt free and actually quite comfortable. . Not rich but ok.

I would willingly deal with £30k of debt and more if I could have my husband back.

You are absolutely correct........life is short......sometimes far shorter than we expect.........

Tell your wife that there are worse things in life than debt.

worriedDan

lessonlearned wrote: »

Everyone handles stress differently.

Obviously your wife is finding your financial situation more stressful than you do. This is probably linked to fear.

On a practical level - as a "just in case". Do you have income protection cover. This might give her a bit more piece of mind and ease the stress for her. That and your £13k which is a good buffer.

As for her feeling "shame". Again this is something that is also personal, linked to feelings of guilt and perceived "failure". A lot of that could be down to her upbringing.

In the grand scheme of things debt is nothing to be "ashamed" about - it's not a criminal offence for which we get flung into debtors prison. There are murderers, rapists and thieves out there. Falling into debt just doesn't compare.

Here's a little tale you might tell your wife to give her food for thought and maybe help her put things into perspective.

My husband and I were doing fine......until he got sick.

We racked up £30k of debt during his illness, just trying to survive.

He died.......I am now debt free and actually quite comfortable. . Not rich but ok.

I would willingly deal with £30k of debt and more if I could have my husband back.

You are absolutely correct........life is short......sometimes far shorter than we expect.........

Tell your wife that there are worse things in life than debt.

As someone who has got into a real state over my own manageable debt, I find this post inspirational. I am so sorry that you have lost your husband. It gives me perspective. I wish you well for your future. x

lessonlearned

Yes Dan, I have been reading some of your threads. I can see you are frightened and anxious.

But.....you have a good income and you have made a good start. Just stick with it and you'll be debt free before you know it.

Re the anxiety and stress, I think you'll find that will gradually ease as you see those figures coming down. You will become more confident as time goes by.

Good luck, keep posting, I shall enjoy watching your progress.

boxofpaws

It's very early for me to speak with any authority, but we have a similar income, similar debt and the ability to pay it back at a similar rate as you so here is my approach.

• I would prefer not to have debt
• If one us lost our jobs, we'd be in trouble until we got another one.
• I worry that our debt to income ratio might affect us when we come to remortgage.

However

• I do not worry about it (except in my very darkest hours), our jobs are fairly secure, we are paying it back and worrying about it won't help, action will.
• I do not intend to spend the next 3 or 4 years self flagellating either (I have said these very words in my diary). I will have holidays, I will enjoy my life. I want to clear the debt but I do not want to miss my 40s.

As for seeking the reassurance and advice of strangers, thats exactly what this forum is for, and is why I'm on here every day.

moneyfacts

In answer to your question, no, manageable debt is not ok. Spending money you haven't earned is foolish unless it's for certain things. It's make you more venerable and shows you can't budget and you live beyond on your means because you feel you deserve a better and more material life. Above all, it shows how you have been exploited by the banks, costa and John Lewis (or whichever your shark was).

Oh, and a car lease is absolutely not an expenses. It's a waste of money, in fact one of the biggest ways to waste your money.

I hope you enjoy working, because that's what you will be doing till your 73

FatVonD

Could you reach a compromise with your wife and continue to pay off your debts at the rate you feel comfortable with but then just for one month every now and again (say once each quarter) really tighten your belts and throw everything you can towards clearing just one of your debts that month.

You wouldn't be missing out on life too much to just have a super frugal month here and there and it might make your wife feel better seeing the debt come down in a big leap (and who knows, you might actually grow to like it too!)

bezza59

moneyfacts wrote: »

In answer to your question, no, manageable debt is not ok. Spending money you haven't earned is foolish unless it's for certain things. It's make you more venerable and shows you can't budget and you live beyond on your means because you feel you deserve a better and more material life. Above all, it shows how you have been exploited by the banks, costa and John Lewis (or whichever your shark was).

Oh, and a car lease is absolutely not an expenses. It's a waste of money, in fact one of the biggest ways to waste your money.

I hope you enjoy working, because that's what you will be doing till your 73

I find your tone a little rude here, Moneyfacts.