What did you do to get into debt?

Pixie5740 · 29 November 2018 at 6:52PM

Unicorn_cottage wrote: »

But! Sometimes if you are savvy having access credit on 0% or low apr can be a 'help' as long as you don't let it get out of hand. Dave Ramsey preaches no credit but Martin Lewis is more along the lines of use it if it works for you. I would be stuffed without access to low or 0% finance.

YNAB have a, "take the bait but not the hook," philosophy towards credit cards etc. My credit card gives me cash back and Section 75 protection on purchases and doesn't charge me for transactions when used abroad. As long as I pay it off in full each month, which I do, then I get paid for using it plus the other benefits.

:money:

TommyTBFC · 29 November 2018 at 7:16PM

Interesting thread.

For me, I got left money at 18 when a relative passed. Literally pis*ed it up the wall. 7k gone! Enjoyed the lifestyle and wanted it to carry on but had no money and no job. Got an overdraft of £200 but that soon went. All it took was 2 clicks of a button and overdraft was extended. Got to 2k before bank eventually stopped me from extending. Left it a few years and managed it. (Only ever paid minimum on it) throw forward a couple of years. Started working etc etc but money was tight. Have comes credit card 1. Maxed. 2. Maxed. 3 maxed. Can’t get a credit card anymore or overdraft. Here comes payday loans! Then eventually a consolidation loan. Eventually 6k later penny finally dropped and tomorrow I start a DMP with step change. The only way is up right? Or down hopefully :T

nubbz · 29 November 2018 at 9:03PM

Basically the same was really young 18,21 or something like that.
Registered for online banking and got a personalized loan quote and within 10 minutes I had a £8000 loan.

8K turned into 15k turned in 25k turned into 33k.

Fireflyaway · 29 November 2018 at 9:07PM

My mistake was buying things on credit (next account, furniture, holidays etc) and then realising I couldn't make minimum payments. I took a loan to try and deal with it (stupid). Then when my income dropped I missed payments. Tried to keep up with credit repayments rather than priority debts (stupid again) so missed car payments, got into mortgage arrears.
So to sum up, I was young and living above my means.
As a young person living at home I was accustomed to nice holidays, meals out and always had money. I never paid any bills so my salary was all spending money. When I met my husband without even thinking it through we tried to carry on the same lifestyle. My parents had a 30 year year start. They saved, worked hard and went without. We didn't think about that though.
To sum up, in my opinion credit is not a good idea. If you don't have the money you can't afford it. Even if you are responsible you could have a job loss or illness then get behind.

weeg · 29 November 2018 at 9:26PM

Two things:

1. I trusted my brother. He was doing property development and had a shortfall just after having a baby. I took out a bank loan to help out, believing him when he told me he'd cover all the payment. He did - for a very short while.

2. I lost my job due to the recession 10 years ago, and couldn't get another one. Self employment kept me fed and watered, but couldn't service my(/my brothers debts) and it took me too long to realise it wasn't going to be a short term thing. Going from £30+k to £8k a year is hard, even when you start from a good place.

These days: Finally (and I do mean it took 10 years) back earning £30k. Plus I met a man to split the bills with. 18 months to debt free, I reckon.

nyc_451 · 29 November 2018 at 10:11PM

I'm 29, never had any debt until I got a mortgage half a year ago. Had quite a bit of money saved up for furniture etc, but some bad decisions and lack of diy skills resulted in wasting a lot of those savings. So I decided to take out a loan, current balance is £10,500 @3%, with monthly repayments of £215 for 5 years. The idea of owing so much money and not having savings freaks me out every single day...especially now with this brexit thing...

Have two credit cards but they're paid in full monthly. I hope I will not be in a situation where I need to borrow money again, I hate the feeling of being in debt.

Greta_Sharbo · 29 November 2018 at 10:15PM

The summer before I went to uni I was booked up for a holiday with friends. A few weeks before it I had no spending money so was looking for a job for a few weeks. In town - popped into bank to ask about opening a student account. I didn't really know that student account comes with overdraft. Ten minutes later I had a new account and ready access to the money I need for holiday. That's where it started.
When I went to uni I took out a credit card, then another, then another. When I couldn't afford the repayments very easily I got a bank loan. Usual story - consolidated the debts but then I had shiny credit cards with credit available again. Didn't learn my lessons. A number of years later I was literally days from being homeless through being unable to manage repayments and rent when I cracked and told family.

I spent the first 14 years of my adult life constantly in debt.

No-one to blame but myself though. And with virtually nothing to show for it.

Thick_n_Thin · 29 November 2018 at 10:27PM

Started as soon as I could get credit, buying things on catalogues then credit cards then loans, I had a belief ( and sometimes still do) that I am entitled to the things that I want! I have never lived within my means, never stuck to a budget, I’m hopeless at saving, I have to spend every penny I earn, my parents however are from the era of living within your means, savers and quite frugal I suppose, I think I just rebelled against my upbringing, but I was never really taught about money either at home or at school and I definitely agree it would be a valuable part of the curriculum as I belive we are sitting on a timebomb now. One consolation is my other half is very sensible with money, frugal by nature and dosnt ever ‘want’ anything really but I have got us into some tricky situations over the last 20 years. My wake up call is I have suddenly realised we have hopefully a long retirement ahead of us but not much left of our working lives to fund the lifestyle that we want to have so now I’m determined to change!

bertiewhite · 29 November 2018 at 11:37PM

Getting divorced did it for me.

trailingspouse · 30 November 2018 at 12:02AM

When I taught a Y3 class, I did a little thought experiment with them.

They had to imagine that they got £5 per week in pocket money. They were going round the shops with their Mam, and they saw a computer game that they really wanted. It was £10 (this was a while ago!!). I asked them what they would do? The answers were as follows -

ask Mam for £5
if Mam didn't have £5 on her, get her to go to the cashpoint for it

Not one of them (class of 36) thought of waiting until next week when they would get another £5 and could therefore afford it. Not even after I reminded them that they got £5 a week. And none of them even considered that they might have some money left over from last week.

I then suggested that there was another computer game on the shelf - it wasn't as good, in fact it was pretty rubbish, but it was only £5 and so they could afford it. What would they do? Quick as a flash one of the kids said he would buy it.
I pointed out that if he did that, he would end up with a computer game that he didn't want, and no money...
I'll never know if the lesson made any difference to any of them, but you can only hope.

What did you do to get into debt?

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