How debt-adverse are you?

Legacy_user

How debt-adverse are you? Do you think that debt is perfectly normal or do you try to avoid it at all costs? Or are there certain circumstances where you think debt is OK, and others where you think it’s risky? Has your thoughts towards debt changed as a result of your debt free journey/experiences of debt? I’ve noticed that ever since my 25 birthday in March where I had a money/life epiphany and decided to look after my finances a bit more seriously, and save to buy, I have become a bit more debt adverse, in the sense of not wanting to have a balance on or trying to reduce the balance on my credit card/s where I can, reducing my overdraft gradually over time and just in general having saving accounts for different things (piggybanking) which has reduced any need to have a form of reliance on credit. And I’d much rather save to have things and buy with my own money. As a whole I do think credit card/s are good when used responsibly but I’m not a huge fan of using them solely for everyday expenditure or constantly paying a large chunk constantly a month in arrears. In other form, I do think ‘debt’ is okay when it comes to university or a mortgage. What are your thoughts? Is debt necessary in this day and age? Or do you think there’s always something one can do to avoid it?

worriedDan

At the moment I am very debt adverse. after years of overspending and racking up enormous CC bills. I am now on a journey to debt freedom.

I do sometimes worry how I will feel in years to come when I am debt free. Will I buy a car on finance, or take a loan for a new kitchen? I hope not, but I do sometimes wonder how I will feel about manageable debt in the future.

-taff

The only debt I have currently is a mortgage. I don't want to find myself in the same position I was in years ago with numerous credit cards and loans, all thankuflly affordable at the time, but all at minimum payment because i didn't have a clue what I was doing, or what I was spending it on.
And I know how quickly your life can change so something that seems affordable now might not be in a months time.
So, totally debt-averse now.

datlex

-taff wrote: »

The only debt I have currently is a mortgage. I don't want to find myself in the same position I was in years ago with numerous credit cards and loans, all thankuflly affordable at the time, but all at minimum payment because i didn't have a clue what I was doing, or what I was spending it on.
And I know how quickly your life can change so something that seems affordable now might not be in a months time.
So, totally debt-averse now.

Same here only debt is my mortgage. I am overpaying it by £10 each week as I get paid. (and intend to over pay more as and when I can). I have a credit card that I use to pay for most items as it is a rewards card. I don't use it for additional funds and it is paid off in full. I used to have loans in the past and had some issues with those. Now if I want something I save for it. So for example I want new furniture for 2nd bedroom (might get some second hand but still need to save) so I am putting aside money each week. Same with a holiday budget. I have found saving up is much more liberating, I can actually get nicer things than if I took a loan and had to pay it back.

Willing2Learn

I don't think there is anything wrong with having debt, as long as it is budgeted for, within your monthly/annual budget.

I have what appears, at first glance, to have a lot of debt. But everything is budgeted. The debts are all 0% promotions and I am stoozing the debt accounts with saving accounts so that I am making a profit. I also have a six month operating buffer to cope with any unforeseen emergencies.

sourcrates

I am extremely debt adverse now, after twice going insolvent, i do not intend to go down that particular path ever again.


Having said that, my budgeting skills, should, in theory, pass muster, unfortunately the reality is far from it, i tend to run short of money a week or so before i`m paid again.


However i do not resort to credit, no loans, no credit cards, no credit accounts, everything paid with money i earn, i`m not in hock to anyone, or more importantly, any bank or debt collector.

Lauralou79

Some people can make credit/debt work for them and their lifestyles. After spending a little too much on credit, overdraft and small consolidation loan in my twenties. It took well into my 30s to pay it all off.

I'm now not interested in credit and the only debt we have between us is our mortgage which is being overpaid a little each month. My partner is very anti any form of credit so has definitely influenced me. I save monthly to pay for holidays/house related/future.

Novice_investor101

I'm quite debt adverse. I only have a mortgage & student loan. The student loan I barely ever think about as that would never be a debt where the debt collectors would call & if it's not repaid, it eventually gets wiped off. A mortgage is a necessity for most people.

I have 3 credit cards, one 0%, one 9.9% Apr & one 17% Apr. None of them have a balance on them. I have them purely for emergencies & for paying for expensive items (for the S75 protection). I'll always pay off in full so accrue no interest.

If I choose not to pay off in full, or don't want to deplete my savings hugely then at least it'll be an interest free loan as I pay it off.
I only keep the 17% one as I've had it for over a decade & it helps my credit history. It's the last card I'd use if I needed to.

I'd never make a planned purchase, like a car or holiday, on credit cards. I'll save up for those. The cards are only for unplanned events - such as expensive car repairs. The cards are only there to give me options & flexibility. I don't see them as money to be spent.

MallyGirl

I am only averse to debt which costs me interest. If I can borrow at 0%, or a less than I am earning in interest then I am happy to do so

zippygeorgeandben

I've been officially debt free for 9 days now so I'm wondering how I feel about debt. Everyone reacts differently. Unlike other posters, unless there is a change of circumstances, I will always have a surplus at the end of the month. All my monthly outgoings which must happen (i.e. rent/tax/bills) adds up to just 33% of my salary, meaning I will have a fairly healthy surplus. However, will my mental attitude to money now change? i.e. I have more money to hand so I will spend more money accordingly.
I do think though that you have a responsibility to save for a change of circumstances/emergency and not blame the change in circumstances for then getting into debt.

lildoonbuggy

I initially wanted to say I'm agnostic to debt, because emotionally i have no feeling towards it, but reflecting on my behaviour I'm probably quite averse to debt on depreciating goods. My husband and i have a credit card each which we use for all non bill related costs and is paid off in full. We up the limit whenever there's an offer but have never paid interest. We have previously taken on debt for a car and medical procedure, but both times they were paid off in under a year. We pushed our budgets hard to pay them off early so I guess that makes me semi-debt averse, or at least debt anxious. Ive never had any debt issues in the past, but have lived on the poverty line so am fairly frugal when it comes to purchases and mostly buy second hand. In investment terms however I have quite a good risk appetite so have no concerns when it comes to mortgages etc.