Reasons for Debt...

[Deleted User]

One of the hardest things about debt is when one person in a relationship ends up 'carrying' the other person simply because that other other person is too selfish to stop and think about what they are doing and also because that other person is allowed to rely too heavily on the 'dependable' one, or the one who is still earning.

Whilst it may not be their own fault as to how someone in a relationship became debt ridden - and in a lot of cases things like redundancy go hand in hand with feelings of inadequacy and shame - there needs to be a line drawn, under which you, as the main earner, will no longer tolerate self pity and lack of positive action. By positive action, I mean something along the lines of jointly trying to draw up a budget and stick to it - not going further into debt - and not blaming the other person or trying to encourage them to spend their way out of the problem.

Mary Poppins - if this is your situation it is a tough one. But you need to be tougher. If you are the person with the spending power - you also have the power to say 'no' and insist on working out a budget that you can both stick to in order to get thru this.

The worst thing a partner/spouse can do is to continue to pay off the other's debts and keep spending. The other person has no sense of responsibility or respect for the one who is earning and paying for everything, and as much as you may care for them you need to think about the future.

People who are down on their luck through no fault of their own, rightly feel bad about things - but they have no right to drag down what is otherwise a good partnership/marriage or make the person earning - feel guilty enough to keep shelling out.

nh

If your partner is rubbish with money you should take over the whole household's accounts, have your partner's pay paid into your bank account and just give him/her 'spends' each month and make sure they do not have access to a credit card or bank account.

I am not referring to your particular situation Mary Poppins, just generally.

My husband-to-be found this quite hard at first (though he is not that bad with money, we just decided it would be best if I controlled the finances as I am much better at these things) but he is coming round to the idea now that we seem to have a bit more than we used to (ie. he is not spending it without thinking first!).

nearlyrich

I got into debt when my ex husband decided he didn't like the responsibility of having children and walked away without any intention of paying maintainance without lots of court appearances which cost me money.

I had a credit card but no income and still had all the household bills and the children & myself to feed, it didn't take long to spiral into debt.

Fortunately I managed to get a job and dig my way out of the situation. I have since remarried and we have a really good way of sorting out our money with a joint account for bills and no further interest in the rest of each others money. My husband had an ex-wife who spent all his money! We decided early in our relationship that we would not argue about money.

I still use a credit card but I have a direct debit set up so I pay the balance on the due date not just the minimum payment. That means I can't spend more than I get into my current account per month. It also means I have to be strict about claiming work expenses regularly. I do have a reasonable overdraft arrangement for emergencies but I don't like paying interest and bank charges either.

We have equity in our property but we wouldn't dream of blowing it on something transitory like a holiday or a car.
I always try to save for holidays and Christmas so I am not still paying when the memories have faded. I could get loans and have credit limits on cards far beyond what I can afford to pay back each month. I think the financial institutions definately encourage people to spend money they haven't a hope of paying back.

I realise I am fortunate to have got to the position I am in but I also know how many times I have not spent money I don't have. I know what I can afford to spend on a holiday and I don't feel under pressure to have the latest TV or whatever. I was brought up in a large family where we never had money for anything but essentials We had lots of love and support which is more important than having designer labels.

I hope I have brought up my children to understand the value of money, I gave them their spending money and school dinner money monthly by standing order from the age of about 14. If they make a mistake and spend too much they have to get up early and make sandwiches.

Better that than being unable to budget and running out of funds when they start college miles away.

The celebrity lifestyle comes at a price and whoever said money can't buy happiness was dead right, you only need to look at these people who have endless money to buy stuff but it seems they are never satisfied.
In the days when debt was something to be ashamed of people were more content with what they could afford.

[Deleted User]

Congratulations NearlyRich.

Seems you have not only done well in terms of money but you are now in a good marriage with someone else who understands the concept of budgeting.

It's heartening to hear also that you are teaching the kids how to budget and about the value of money and what they buy.

The Trevor Mcdonald programme recently highlighted a family who gave the older children a months allowance but they had to buy certain things with that, as well as whatever else they wanted. It seemed to work for them.

Teaching kids about this sort of thing is vital to trying to 'debt-proof' them for the future. The schools don't - so it is down to the parents.

Kids are under a lot of peer pressure these day to wear the latest stuff etc... and the parents are under even greater pressure to try and make sure their kids don't miss out.

Drawing the fine line line is difficult but can be done.

Leia_Stephens

I get a buzz out of saving, unfortunately I get more of a buzz out of spending :-[

To help myself save I have standing orders going to my ISA and my Smile no-notice a/c the day after payday each month ;D ;D

The problems are that: I went slightly mad with a 0% RBS Advanta CC at the end of last year, and now I
still have about £1,360 to pay off it

Second problem: I quite regularly give in to withdrawing from my ISA to reduce my CC, or to use for montly living expenses. Fortunately though, I am paying off about £200 off my CC each month

As you can imagine I am REALLY looking forward to have a NIL or in credit CC balance

Leia

nh

we have a really good way of sorting out our money with a joint account for bills and no further interest in the rest of each others money.

I know lots of people have this type of arrangement where the bills are paid from a joint account and then whatever is left is each individual's to spend as they like, but I have never figured out how this works!

What about decorating the house and who pays for holidays? What if one partner earns twice as much as the other and so has much more disposable income and can then have nicer clothes or whatever?

I would say a better way of doing it was to put both wages into a joint account, give each other the same amount of 'spends' every month to spend how you wish, and use the rest for 'joint' things, like bills, going out together, holidays, wedding presents, decorating, a new lawnmower etc. I must admit this doesn't mean no arguments about money! I just cannot think how the other system can work without creating an issue about one partner having more than the other.

lisyloo

We operate the "joint account for bills" system and it works very well.
I would have trouble managing an account with my husbands spending coming out of it.
I wouldn't know what everything was for, for a start.
We trust each other but I would rather just manage my own personal account.

What about decorating the house and who pays for holidays?

We do not pay for these kind of expenses out of the joint account. It is for regular bills like food, electricity, gas, water, phones, council tax, TV licence etc.
Expense like holidays come out of savings.

What if one partner earns twice as much as the other

Then I would have thought that it would have been sensible for one to put in more money than the other, there is nothing to say it has to be 50/50.

We find it very easy to manage our money like this, but I suppose any system that you are both happy with is fine.
We have our personal and joint accounts with the same bank which means that transfers are instant.

Leia_Stephens

My partner and I have 2 joint a/cs - his idea - one for rent and bills to be paid from and one which we use for our food shops and sometimes going out, we both have standing orders going in monthly and the split is about 50/50.

This system works for us, perhaps the next step is to open a joint savings a/c to help save for a deposit

Leia

nh

I suppose with us trying to get our house just the way we want it and saving for a wedding too there is not much left for us to spend on ourselves after that which is why there is not much need for our 'own' money!

But I think we will always do it like that. Both our wages get paid into my account, the bills money then gets paid into the bills account, I transfer to my fiance's account his pocket money and our going-out budget for the month, then I transfer money into our various savings accounts, then there is about £500 left over for groceries/petrol/my own pocket money!

We have loads of accounts: honeymoon, wedding, house, holiday, our own current accounts for our pocket money, everything is budgeted for so we know if, say, one of us wants some new clothes, we have a look at the house account and see how much is in there, what else we might like to spend that money on, and if we decide clothes are the priority we go for it. It certainly saves on arguments if one person comes home with a pair of £250 shoes the other doesn't think were necessary. If I want a pair of £250 shoes it either comes out of my pocket money or we both decide whether it is something we want to spend our 'joint' money on. My fiance lets me have whatever I want but as I am so stingy he knows I never want much anyway!

I have just always viewed the 'other way' as a bit disjointed, tho I realise most couples do it that way. I see my fiance and me as a team, we do virtually everything together (apart from his footie and my gym/fitness training I suppose) so there is no need to have 'seperate' money cos everything we do is 'together'. And when we have kids it will be even more like that, especially if I am working less.

Leia_Stephens

I really admire this financial set-up you have, nh
I wish I had enough self-discipline to do something similar, and I wish that I enjoyed saving MORE than I enjoyed spending

My pay goes into my sole current (with Smile) each month, and the next day quite a lot of my pay goes to other places ???

very easily-accessible (Smile), short-term (ING) and long-term (ISA) savings, to save for my nephew (Halifax), and to our joint accounts, the rest sits in my current account for everyday expenses etc. and for payments to my credit card(s)

Okay, I do have standing orders into savings a/cs but unfortunately money can be withdrawn from them almost as easily as it is paid in :-[

Leia