'normal' amounts of debt in this day and age

chelseablue

Im 33, partner 27


Joint income is £63,000


We have unsecured debt of £4,500 (0% credit card until 2020)


Mortgage outstanding £224,000 (house worth about £425,000)


We have £11,000 in savings so could pay off the card today but while it's 0% I'll keep the savings earing interest and make sure the card is cleared before the 0% runs out

indesisiv

BettyBones wrote: »

I think it's really sad that as a society we're starting to 'normalize' debt and talk in terms of 'acceptable levels' of it and 'averages'. These forums are littered with the most heart breaking stories of people who were chugging along quite nicely with the repayments on their 'average' and 'acceptable' levels of debt until job loss, sickness, divorce, redundancy, interest hikes etc hit them. And we would do well to remember that there but for the grace of God go all of us! Some of the stories on here worry me to death and I really hope I don't ever end up in their position. So I don't ever want to think of having debts as just the norm

Totally agree with this. I was happily chugging along with approx 15k worth of debt this time last year. But then realised a) how much I was actually paying per month vs how fast it was going down. b) If I put some effort into this and get it paid off I could save that amount each month and have a savings pot in case any thing went wrong.
c) I can then start to save for nice things once I pay it all off ... such as early retirement :rotfl:

Normal level of debt should be zero!!

1 debt left to go for me now.

[Deleted User]

There is no normal. You can't use others to justify your own financial situation.

Debt isn't necessarily a bad thing, or a good thing in its own right. Just don't use others as a way to justify your own habits.

Mofette

worriedDan wrote: »

I agree that this can cause depression - I am currently going through these very issues as a result of my debts. I also agree with your comments about plugging away at it. This is what we are doing at the moment - plugging away 2k a month so get rid of it asap!! We have still allowed for a few treats though - a few drinks or a pub meal out once or twice a month.

Funnily enough Dan I'm just in your thread on page 2 and it's inspiring how you've done so far (13th Feb).


Money is a major cause of depression and argument in my marriage, it's come close to breaking point over it a few times. He hid debt from me when we were applying for a mortgage, he made poor decisions with a house he owned and only my credit history was able to bail us out, he said "yes" to me buying things (paying on his card when his account was already overdrawn) and I see parallels, I was angry that he kept from me rather than we were in that state. I can fix what I know about!


I am rooting for you, buddy!


Our key is not to completely deny ourselves. Within our budget we allow £100 each, each month for 'play' - be that beer, nail polish, computer games, whatever. It ensures we feel like we're not completely bereft of fun. And that debt keeps falling, slowly but surely.

Danni-R

I'm lucky I guess.

I am 30 something. I have a debt of just under £2k. and my mortgage of £90k. My dad's an accountant and is annoyed at my CC debt (as am I). I think 'debt' for my generation is seen as normal which is sad.
Just typing this, I've forgotten I have a student loan of £8k. But that's 'good' debt and 'nothing to worry about' as it wont impact my credit file.
I have friends who have new sofas on credit. I just don't get it.

takman

Like others have said asking what a "normal" amount of debt is and comparing it to your own won't help your situation one bit!. The "normal" amount should be an amount and mixture of debt that results in a healthy financial situation.


In my opinion the only "good" debt that costs interest is a Mortgage. This helps provides an essential in life and if you didn't have a mortgage you would have to rent so having a mortgage saves you wasting money on rent.


Any debt that is interest free is good as long as you have the money to repay it in full in savings or investments.


All other unsecured debts that you paying interest on should always be classed as bad debt and you should seriously question the reasons for taking on this debt before you commit to it.


If your working and don't have atleast the total amount of your unsecured debts plus 3 months salary in savings then you need to take action and sort out your finances!.

lazer-zxr

Now, aged 36/37, joint income: £73k; Debt: £6k + mortgage
2 years ago: 34/35, joint income £64k; Debt: £59k + mortgage

dktreesea

indesisiv wrote: »

Totally agree with this. I was happily chugging along with approx 15k worth of debt this time last year. But then realised a) how much I was actually paying per month vs how fast it was going down. b) If I put some effort into this and get it paid off I could save that amount each month and have a savings pot in case any thing went wrong.
c) I can then start to save for nice things once I pay it all off ... such as early retirement :rotfl:

Normal level of debt should be zero!!

1 debt left to go for me now.

What a great line!

missg2210

I'm 25 & earn about 70k ish. I have 40k saved but this is heading towards a house deposit and no debt. Everyone is different but I don't buy things for the sake of it and don't have latest gadgets etc very frugal with my money aka...tight haha. I just spend a lot on holidays and travelling

Arfa__

I'm 38, OH 39: joint income is about £75k, unsecured debt is £30k, Mortgage £95k, but only 11 years left at house is worth around £230k.

Both our parents were never high earners, but we pushed ourselves through Uni, OH in nursing purely for the bursary, myself though, came out in 2001 with £10k debt. Did immediately Get a job for big Jap corp. doing video games in central London, so no Mc'D degree. However starting out in London was tough, needed £2.5k just for first months rent and deposit! So, when you start real life with £13k straight off the bat, it's hard see any life without debt. And kids today start out with way more than this!

Sure we blew a lot of cash on London living and having fun in our twenties, but we did blag one of them crazy 110% mortgages and get on the property ladder, bit risky, but was early enough to ride out 2008 shitstorm and now comfortable have £120k+ equity. However over the years, we never ever ditched the debt, gradually kept piling up more: essentials for house (central heating, kitchen, conservatory, white goods etc), education (OH retrained in law, did 2nd degree, MA and PhD with scholarship but writing up took some time), 2 kids, childcare (£1300/month at peek), car to ferry them about, 2 motorbikes to commute into city on (both commuter hacks <£2k), computers for study etc, but yes way too much frivolous stuff too. There was also a wedding we almost entirely funded ourselves, though very few holidays beyond Butlins over the years.

The job for the Jap corp doing video games wasn't all it was cut out to be, salary barely grew over 11 years, promises of royalties & bonuses - good in the hay day, but all dried up around 2008. Should have jumped ship earlier, didn't realise the pay was quite so crap until I walked into another job earning £15k more! A bad choice to stay and finish the next big project to bring in the bonuses, that had us building up debt just to get by. Not a good position - avoid at all costs.

We've cut corners everywhere, everything is cut price, very little is bought brand new, anything spare of value is flogged on ebay, I do a tonne of blogging on the side, affiliate marketing, freelance web coding, releasing Wordpress plugins etc. Anything for extra cash, even if I lose 40% to HMRC...

Typical debt? Justifiable debt? Doesn't matter, all I know is we're struggling now, paying way too much each month to cover it. I know our wages should allow us to do a hell of a lot more, but can't because we can only just cover the debt. Better choices in the past could have improved matters. Hell, without this debt I'm sure we could move to a damned sight better property fairly easily. We're on the case now, making most of 0% cards & super low % loans etc to try and make some head way, but there's still a long haul ahead, but at least things are on the up now my OH has completed her PhD as is earning again now.