What did you do to get into debt?

secretdebt

I got into debt through gambling.

Had the ups and downs, and plenty of opportunities to pay off the debt with winnings, but never did.
Literally had a crazy hour where I went from having c£30k, to having c£50k of debt. I was able to get a loan of £25k within 10mins or so, and then 1 horse race later it was gone. The rest on cards I already had.

Crazy, crazy time, and all that wasted cash with nothing to show for it. I’ve spent 4 years now paying it off, and I’m still 5 months from it. Once it’s paid off I’m gonna have a load of spare cash each month, because I’m used to not spending much anymore.

Don’t gamble...

natlie

Not budgeting and living beyond my means.

Its been great but I am paying for it now

FTBuyerGlasgow

Started to become aware of debt when I visited my bank, age 17, nearly 18 and they mentioned a credit card.

Never thought anything of it then just after my 18th birthday they sent me out a credit card. Honestly don't know how they were able to do that without me asking but there you go.

Passed my driving test that year, got a car (with a lump sum "windfall" from a personal injury claim), continued to spend like I had that money in the bank, started using CC for fuel/insurance/withdrawing money, partying 4 nights a week - basically living the life. All the while working part time (£100 a week which helped service the £1300 debt) and going to uni.

Spent too much money on a relationship that was dead in the water, including the last of my "windfall".

Cleared the debt after working all the shifts possible during the summer, thought I was in a good place, started spending again.

Holidays, gadgets, car insurance, pretty much everything went on the CC or the overdraft.

Consolidated.

Spent.

Consolidated more.

Spent more.

Consolidated even more.

I had a £7.5k consolidation loan in my mid 20's going into a meeting with my mortgage advisor. Luckily I've always been extremely sensible with our joint finances and we got our first house 5 years ago.

First two years were tough, we lived on charity furniture and hand me downs, priority bills were always paid but my overdraft crept up whilst the loan was paid down.

Loan paid off, £3k overdraft - got money transfer card and cleared overdraft.

Got engaged, planned and paid for a wedding (with savings), but leading up to it a few nice holidays, some purchases and today I'm about £12k in debt (£6k of which is a personal loan for a car I need for work and £6k on 0% cards).

My income went from £18k in 2013 to £51k in 2018 (which is really saving my !!!!), debt is being smashed at £1k a month.

All being good I'll be debt free some point late next year, about 15 years on from my first credit card.

lookstraightahead

My first experience was moving to London where my income was less than my expenditure. Then access to an abundance of credit. Also life threw stuff at me, negative equity and a messy divorce.

I agree teach finance in schools, but also parenting plays a factor. I worry nowadays as parents want everything now - so kids follow.

enthusiasticsaver

Towser wrote: »

MMM...

I see. I have never been tempted by credit card. It makes me panic/shudder.

I have had loans but paid them off really quickly, again panic sets in. I don't do credit fullstop.

I wondered why so many people are in trouble.

I cannot go to a shopping centre, the thought of going wild with a debit card makes me panic.

The mortgage on the otherhand is fine. I just treat it as rent. I don't try and pay it off fast. It's the lifetime debt I have been saddled with.

I worry about bailiffs knocking on my door. It could have easily happened when an insurance claim was trickier than usual but all worked out in the end.

Avoiding credit apart from a mortgage has helped you avoid debt problems. My dad also taught me that credit cards, loans etc should be taken out only as last resort and only at 0% or a low APR. Saving for things and waiting until I had the money was the way to go.

Having been a debt counsellor in the past I would say the following are the two main reasons why people get into debt.

Circumstantial debt like protracted unemployment or sickness, maternity leaves and high childcare costs, moving house without assessing the expenditure needed to make it livable, bereavement. Gambling addiction or shopping addiction also falls into this category.

Then there is the debt spiral for people living beyond their means, gradually putting more and more on credit, consolidating into loans and building it up again until they get to crunch point. People who struggle with delayed gratification or who have the attitude the money is there so needs spending would also fall into this category.

The thing to do with either of these is act early before it gets unmanageable. Speak to your lenders, put cost cutting measures in place and don't bury your head in the sand. The problem of course is that for many debt problems go along with mental health problems so addressing it is not easy.

Bellisima

Buying a house in 1983 meant we were always broke. The house needed so much work. We were both on basic wages, but we slowly did it up in a very economical way. The mortgage interest was 14% at the time. Our repayments were about £500 a month. We drove crappy cars that kept breaking down because we couldn’t afford anything better. We never had holidays. Sometimes we were in debt on the credit card just for buying basic food etc. It was never because we squandered it on a champagne lifestyle! In the end my mum and dad lent us some money to pay off the credit card. I then cut the card up and never, ever got another one.

Granted things are easier now as the mortgage has been repaid, but we were living by the skin of our teeth.

chelseablue

Think I'm slightly different in that I didn't start young.

I got my first credit card when I was 21 and didn't use it much (only got it to start building a credit history) and when I did use it I paid it off in full.

I'm 35 now

Was totally debt free (apart from a mortgage) until this year

We got married in June which we saved up for, but had to also buy a car in March that I got a personal loan for, and we are going to Australia next week on holiday and I put the flights on my credit card as we used our savings for the wedding.

So now I owe £14,000, its all 0% until 2020 and currently paying it off as quick as possible but it does make me feel ill owing that much.

If we didn't do all those things this year I'd be debt free still.

Maybe the moral of the story is don't get married :rotfl:

LullaBelle

I worked in a bank and in order to meet their targets they made the staff take out a staff credit card. I took it out never intending to use it. Once it came through it was a total novelty. I remember the first time I used that card. I was in a clothes shop and bought something for £20. I had £20 in the bank but just wanted to use the credit card. BIGGEST mistake of my life. Fast forward 15 years and look at the debt we have now. How naïve I was then!

BabyStepper

Deleted_User wrote: »

Wish they had taught me more about being a financially secure person in school, would have preferred to know about money than knowing how to make an upside down pineapple cake :p:p

Dxxx

Absolutely true! :rotfl:

enthusiasticsaver

I think financial education should be taught more in schools but personally I think parents have a role to play too. My dad was anti credit like many of his generation but was a very successful businessman and I respected him so developed a healthy fear of credit myself except for buying property. They taught me to save from a young age, 7 or 8 and we did the same with our daughters. My first job was in a bank and in those days staff had to have scrupulous financial affairs and going overdrawn was a disciplinary offence reinforcing further my fear of overspending. Consequently to this day I have never gone overdrawn. However these days students are encouraged to go into debt with student loans to the tune of thousands. They are encouraged to get a credit card to build up a credit rating regardless of whether they have the financial discipline to know when to stop spending and taking time on purchases, saving for them or researching is positively discouraged by the prevalent use of 0% credit cards. I am not sure that education alone will stop people spending more than their income or start saving for the future. Attitudes also need to change and a fear of debt positively encouraged. That won't happen though while the big financial institutions are making so much money off the back of people heavily in debt.