The mental physchee that gets you into debt in first place?

Mitzj7374

Hi all, I’ve been wondering this for sometime some of my friends I help get out of debt and they seem to be straight back into it after 2 months etc.

Is there more to it then mental state?

Mitzj7374

For example some millionaires I know. Will get an iPhone XR pay the contract off and keep the phone for like £9 a month instead of paying £72 or whatever a month, is it a class thing?

Kakiste

I think it's a generational thing. Due to the amount of media in all our lives now, people are constantly bombarded with stuff and experiences that they 'must' have and it's really difficult for so many (including myself) to say 'no. I want it, I don't need it' or to save until they can afford it outright. 
There's also an element of keeping up with the Joneses that people are initially unwilling to say 'actually i can't afford it'
However, what I've noticed over the past 18 months is that once you stick your head up and say "Sorry I can't, I'm concentrating on paying off all my debt right now and I can't afford it"  so many people then level with you that they are in a similar position and you can find alternative free stuff to do together. 

John_

Mitzj7374 said:

For example some millionaires I know. Will get an iPhone XR pay the contract off and keep the phone for like £9 a month instead of paying £72 or whatever a month, is it a class thing?

You know several millionaires who have done this?
That seems very unlikely when they could save money by buying it outright.

Galloglass

Is there more to it then mental state?

Depends if there is an underlying mental health issue. If you friends want help, they might want to have a word with their local debt charity.

If you want an answer to your question, without involving your friends, there are a number of studies in this area (Northumbria Uni has one) which looks at the UX (user experience) tricks that financial companies use to make debt look easy and affordable. Some of the UX is based on knowledge/testing from gaming/computer games. Linked to this is some academic work by Gamcare and others on why people gamble.

speakingofart

Do you mean psyche?

If so, I’m not sure there is one answer - usually a combination of luck, circumstance and occasionally stupidity. 

alt80

I have what most people would consider a high income (c.£7.75k/m after tax), run my own business, drive a new 'full fat' Range Rover, live in a 4 bed victorian detached in a conservation area and have a seven figure property portfolio. You'd probably think I was doing well for myself. I also have five figures of credit card debt, six figures owing on cars and seven figures owing on property in total. All my tenanted houses have sinking funds and I can cover almost any big job that would need doing but the boiler service for my home is put on credit. Less than two years ago I remortgaged my portfolio to pay six figures of credit card debt. Today I have just over £40k outstanding on credit cards. I have a severe problem with debt and am heavily leveraged in business too.

Yes I have a mindset problem; nothing is ever enough. No amount of money would ever be enough for me. I'm the kind of guy for whom only billions would potentially satisfy me and to admit there's something I couldn't afford is humiliating - proof I have not done well enough. 

John_

alt80 said:

I have what most people would consider a high income (c.£7.75k/m after tax), run my own business, drive a new 'full fat' Range Rover, live in a 4 bed victorian detached in a conservation area and have a seven figure property portfolio. You'd probably think I was doing well for myself. I also have five figures of credit card debt, six figures owing on cars and seven figures owing on property in total. All my tenanted houses have sinking funds and I can cover almost any big job that would need doing but the boiler service for my home is put on credit. Less than two years ago I remortgaged my portfolio to pay six figures of credit card debt. Today I have just over £40k outstanding on credit cards. I have a severe problem with debt and am heavily leveraged in business too.

Yes I have a mindset problem; nothing is ever enough. No amount of money would ever be enough for me. I'm the kind of guy for whom only billions would potentially satisfy me and to admit there's something I couldn't afford is humiliating - proof I have not done well enough. 

You’ve spent a year’s salary on your car? Why?

[Deleted User]

Kakiste said:

I think it's a generational thing. Due to the amount of media in all our lives now, people are constantly bombarded with stuff and experiences that they 'must' have and it's really difficult for so many (including myself) to say 'no. I want it, I don't need it' or to save until they can afford it outright. 
There's also an element of keeping up with the Joneses that people are initially unwilling to say 'actually i can't afford it'
However, what I've noticed over the past 18 months is that once you stick your head up and say "Sorry I can't, I'm concentrating on paying off all my debt right now and I can't afford it"  so many people then level with you that they are in a similar position and you can find alternative free stuff to do together. 

It's not a generational thing.  Debt has been around since time immemorial.  There was debt slavery in the Roman Empire, in England about 10,000 people a year were thrown into debtor's prison in the 18th and 19th centuries and in our parents and grandparents time people bought things on the never never.  It has always been there except perhaps it's more talked about these days.

[Deleted User]

Mitzj7374 said:

Hi all, I’ve been wondering this for sometime some of my friends I help get out of debt and they seem to be straight back into it after 2 months etc.

Is there more to it then mental state?

I think there are similarities between debt and losing weight.  Logically you know that to lose weight you need to eat less and move more yet so many people struggle to do this.  It's not that the people wanting to lose weight are stupid and don't realise this but it could be down to a lack of education around food nutrition, it could be because the person lacks the skills to make nutritious meals, it could be that food is used to soothe and comfort in times of stress.  There are lots of reasons behind overeating.  I think that debt is the same.  It requires a shift in mindset to tackle it once and for all or you'll just end up slipping into old behaviours.

alt80

@John_ honest answer because I’m a car guy.