people lie about debt

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midlander81
midlander81 Posts: 205 Forumite
in Debt-free wannabe
Does anyone else think that people lie about how much debt they have? I work with a group of 12 people and we were discussing debt in the office yesterday. Almost all of them claim to have no unsecured debt and yet the average person is meant to have something like 13K

Do you think that people pretend to have less debt than they actually have, or am I the minority who actually has debt!
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  • JayRitchie
    JayRitchie Posts: 526 Forumite
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    I suspect there is a lot of variation, depending on age, type of job etc. Plus financial knowledge. A lot of people don't think their car loans/ lease agreements are debt for example.

    I don't think its easy to know how many people have debt. I have a friend who looked into this for professional reasons. The figures he saw included anyone with a credit card balance. He noted that he generally has a credit card balance of a couple of thousand or so but this is paid in full when due - he just uses the card for everyday spending as there is more protection than a debit card.
  • theoretica
    theoretica Posts: 12,306 Forumite
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    One lot of recent data shows that the average household (not person) debt is £15k - BUT around half of this is student debt which many people in conversation may not think to include as debt. https://www.bbc.co.uk/news/business-46780279
    But a banker, engaged at enormous expense,
    Had the whole of their cash in his care.
    Lewis Carroll
  • charlie792
    charlie792 Posts: 1,744 Forumite
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    JayRitchie wrote: »
    I suspect there is a lot of variation, depending on age, type of job etc. Plus financial knowledge. A lot of people don't think their car loans/ lease agreements are debt for example.

    100% agree with this. a large majority of people I work with think nothing of paying a few hundred a month on their car payments or their sofa etc. but if you asked them they wouldn't say they were in debt.

    I suppose it's all peoples perception.

    personally I've always thought of debt as having to borrow to make ends meet, that's just what I remember from my childhood with my parents borrowing to pay the bills, I wouldn't for example class my day to day spending on a 0% credit card as debt, or my mortgage etc
    MFW 2020 #111 Offset Balance £69,394.80/ £69,595.11
    Aug 2014 £114,750 -35 yrs (2049)
    Sept 2016 £104,800
    Nov 2018 £82,500 -24 yrs (2042)
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
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    Depends on age, I know when I've worked with younger people, the conversation has gone about how they can get 8% interest on finance etc :o I just presume by good rates they wouldn't be the sort in to much debt, if any.

    I'm about 3k (I thought it was a lot more but recent close attention revealed the figure) I have 2k available credit (not that I'll be using it) it used to be 9k but fortunately I did something silly last summer and think I got a credit decrease.
  • JayRitchie
    JayRitchie Posts: 526 Forumite
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    charlie792 wrote: »
    I suppose it's all peoples perception.

    personally I've always thought of debt as having to borrow to make ends meet, that's just what I remember from my childhood with my parents borrowing to pay the bills, I wouldn't for example class my day to day spending on a 0% credit card as debt, or my mortgage etc

    Perceptions differ! I think of debt as being anything which means I have to pay money out in the future. So gym memberships - I check cancellation clauses, mobile phone contract, rent/ mortgage.
  • maisie_cat
    maisie_cat Posts: 2,068 Forumite
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    With the prevalence of 0% options around there are going to be people, us included, who have 0% unsecured debt and equivalent savings. Our savings are offset against our mortgage so it makes sense to have 0% debt. I do not consider us as being in "net" debt because we could pay it off tomorrow.
  • MovingForwards
    MovingForwards Posts: 16,925 Forumite
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    Some people may not see debt as other people see it. E.g they owe money and can afford payments so it's not debt, to them debt would be when they can't afford to pay it.

    Other people would see any money owed by them (mortgage, CC, loan etc) would be debt, regardless of whether it's serviceable or not.
    Mortgage started 2020, aiming to clear it in 2026.
  • NorthernMonkey1
    NorthernMonkey1 Posts: 350 Forumite
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    JayRitchie wrote: »
    Perceptions differ! I think of debt as being anything which means I have to pay money out in the future. So gym memberships - I check cancellation clauses, mobile phone contract, rent/ mortgage.

    Probably more correct to think of that is a liability than a debt. a mobile phone SIM only contract as a debt, but it's definitely a liability. There is a grey area if you buy your handset as part of the contract.

    I have a number of liabilities in this respect (Gym membership, pay monthly SIM contract)

    I also use my credit card for a lot of day to day spending, and there is about £1700 outstanding right now, although I haven't paid any interest for years at the're all set to pay off in full every month
  • Brenster
    Brenster Posts: 250 Forumite
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    edited 22 May 2019 at 10:25AM
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    Good Post, as everyone says above it depends how people view different debts;

    On one hand;

    I owe £100k on my mortgage (although have plenty of equity)
    I am tied into a car lease where over the next 2 year i owe £8k
    I have a student loan of £5k
    I have savings at £10k
    So some people would do this sum and say i have £103k debt

    BUT

    Others, would only see the equity in the house....Say £150k, and not the mortgage
    See the car as affordable in my current earnings / car allowance
    Completely discount the student loan as 'its not a real debt'
    So this scenario actually shows a positive of circa £160k

    So based on your perception of debts, my personal position could be viewed as (£103k) or + £160k, which is a difference of £263k !!!!

    I personally happy with my financial position, and it is an individual assessment, no one knows better than yourself, do not allow yourself to base your decision on what the norm is / or what others tell you !!!!
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
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    I don't think I've ever worked in an office where I'd be happy to disclose details about my debt, I only discuss that with my OH as I think it's quite private :)
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