'normal' amounts of debt in this day and age

Money_Rollercoaster

EssexHebridean wrote: »

The sad thing is now that if you are genuinely "debt free" the majority of people think you're a little bit odd...

Are you sure it's the debt-freeness that's making them think that ?

takman

gingerdad wrote: »

It's an interesting one. Not sure any dept is good.

For us we currently earn around £60k and have a dept of £25k but also have £22k in stock for a shop we run jointly. Still trying to pay down the dept as quickly as we can. Also have a 115k mortgage on at )250k house with only 6 years to run.

How did you manage to spell "Debt" incorrectly 3 times when on this page alone it is written 54 times! :rotfl:

Fireflyaway

Debt isn't viewed as shameful or embarrassing in the way it was 30 or 40 years ago and everything from cars to sofas are available on credit. I think it would be unusual to find someone with absolutely no debt.
For us joint income is 78k and combined debt around £2k. That's overdrafts included. Its the lowest its been though. At one point we had 2 cars on finance, 4 credit cards, 2 overdrafts, 2 catalogues and 7 payday loans! That's not even considering we were behind on all utility bills as well. Now I budget, ensure bills are paid before anything else and save if we want something. Our income also increased a lot. If you want more money it can be achieved rather than just accept a bad situation.

gingerdad

takman wrote: »

How did you manage to spell "Debt" incorrectly 3 times when on this page alone it is written 54 times! :rotfl:

Phone auto correct and not proof reading.

EssexHebridean

Money_Rollercoaster wrote: »

Are you sure it's the debt-freeness that's making them think that ?

You've read my diary threads on here, haven't you...! :rotfl::rotfl::rotfl::p

Ashingtonian

I'd class any CC debt on long term 0% interest deals as good debt if it is used to pay off any interest bearing debt such as a mortgage quicker.

worriedDan

Ashingtonian wrote: »

I'd class any CC debt on long term 0% interest deals as good debt if it is used to pay off any interest bearing debt such as a mortgage quicker.

I definitely think of my 0% debt as preferential debt but not necessarily good debt, as it is just debt that we racked up by overspennding

Teacher2

Those born just after the war were brought up to dread debt and to save for everything. Thus, we went without when we couldn't afford things. The exception was a mortgage which was a debt secured on a rising asset which would assist in old age when paid off and no further payments were needed. This usually happened after 25 years so if you took out a mortgage at 20 you could pay it off by the age of 45 and then bank the amount of the payments thereafter as a nest egg for emergencies when retired.

I noticed this attitude was disappearing in the 1980's when credit rules were loosened and credit cards were pushed towards those who could afford the minimum payments. Thus, unsecured debt on ephemeral goods and services became a norm for some. It became habitual to spend on holidays, fashion, meals out and other things which were worn out when the debt was still hanging heavily over the heads of the debtors.

Fast forward another decade or so and a 'subscription lifestyle' (phones, TV services, gyms etc.) has compounded the problem.

I saw the first evidence of the misery this was causing when a 24 year old teacher came to work at my school as her second job. She had left her parents' home when she couldn't really afford to and paid a new deposit every time she moved flat. She had £25,000 of credit card debt which shocked me rigid as she was earning about £23,000 a year. Another young woman joined the team and she had also left home and had £25,000 worth of debt.

One of them moved to the Middle East to save money (no tax, subsidised accommodation etc.) but loved the ex-pat high life and ran up more debt. The other moved to Australia and is still spending as far as I can tell.

I do not know what the average debt for a younger person is but I brought up my children not to spend on credit and to save for what they want. They both say they do and it is probable that they are not in debt - though who can tell as they both seem to buy a lot. If they are solvent then this is the best lesson I could have given them.

I don't want to seem too smug because I am aware that I have not had the life experiences that many others have had: no long haul travel to widen the mind or the cultural forays that make for a generous outlook. I am aware that I am frugal and pennypinching and that this is not a popular frame of mind.

Nevertheless, I feel somewhat safer and more secure than I would be had I been a spender and this is very important to me.

Perhaps that is the answer. The 'normal' amount of debt is what you can tolerate without being made fearful by it. So someone anxious on a decent salary might actually be less happy with a small debt than a confident spender on a small wage with a bigger debt.

Also, if everyone is in the same boat, fewer people worry. I guess that is the reason for your initial request to know what is 'normal'.

[Deleted User]

Having read this thread what is very noticaeable is that most of you are on huge salaries be it sole or joint income where levels of debt are really down to poor money managment . Anyone on large salaries has no reason to be in debt.

This thread would be do much more useful and interesting if it was contributed to by those earning median salaries of about 25 / 26k.

My friends , a couple are not wreckless spend thrifts but they have got into debt by paying for 2 kids through Uni, council tax etc etc. For most people on average salaries it has become so expensive to live in this country you are either on benefits with everything paid or you are huge earners, Mr and Mrs average are using credit cards / overdrafts etc to survive.

Debt and juggling for some people is the only way to get by.

worriedDan

BBH123 wrote: »

Having read this thread what is very noticaeable is that most of you are on huge salaries be it sole or joint income where levels of debt are really down to poor money managment . Anyone on large salaries has no reason to be in debt.

This thread would be do much more useful and interesting if it was contributed to by those earning median salaries of about 25 / 26k.

My friends , a couple are not wreckless spend thrifts but they have got into debt by paying for 2 kids through Uni, council tax etc etc. For most people on average salaries it has become so expensive to live in this country you are either on benefits with everything paid or you are huge earners, Mr and Mrs average are using credit cards / overdrafts etc to survive.

Debt and juggling for some people is the only way to get by.

I understand your point about people on high salaries not being in debt, however I don't entirely agree. One thing that my own debt journey has taught me is that debt doesn't discriminate. A lot of our debt was accrued when we were earning far less. I agree that we are fortunate now to earn a decent joint salary, however this wasn't always the case.

As my salary increased my available credit increased massively. I am not blaming anyone else - I didn't have to borrow the money, however the law of averages suggests that at if you offer lots of credit to people, some of them will take advantage of it!

It's also worth remembering that not everyone on a high salary has a high disposable income. High mortgage costs, travel expenses, supporting children/grandchildren etc may have a huge effect on how much money they actually have to live on. Someone on a lower income with less commitments could be much better off in real terms.