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  • FIRST POST
    • Towser
    • By Towser 28th Nov 18, 10:13 PM
    • 1,186Posts
    • 1,991Thanks
    Towser
    What did you do to get into debt?
    • #1
    • 28th Nov 18, 10:13 PM
    What did you do to get into debt? 28th Nov 18 at 10:13 PM
    I am curious what did you do to get into debt? How did it happen?

    This Forum tip was included in MoneySavingExpert.com's weekly email!
    Last edited by MSE Tine; 04-12-2018 at 9:47 AM.
Page 1
    • sourcrates
    • By sourcrates 28th Nov 18, 10:33 PM
    • 15,898 Posts
    • 14,952 Thanks
    sourcrates
    • #2
    • 28th Nov 18, 10:33 PM
    • #2
    • 28th Nov 18, 10:33 PM
    The usual scenario goes something like this, get credit card, spend on card, get another card, spend again, repeat numerous times and throw in a few loans, consolidate the debt, repeat the above, sometimes more than once.

    A very general assessment obviously, some people can handle their credit, some canít, throw in a few life changes, and you have the basic ingredients for a lifetime in debt.

    Most people view this as normal, and as long as you can service the repayments, it doesnít become a problem, but you end up working to pay your debts, instead of living within your means.

    Obviously most peopleís storyís are more complex than this, but boil it all down, and we simply borrow more than we can afford to repay.
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    • Towser
    • By Towser 28th Nov 18, 10:51 PM
    • 1,186 Posts
    • 1,991 Thanks
    Towser
    • #3
    • 28th Nov 18, 10:51 PM
    • #3
    • 28th Nov 18, 10:51 PM
    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.
    • Choccygirl123
    • By Choccygirl123 29th Nov 18, 8:20 AM
    • 259 Posts
    • 412 Thanks
    Choccygirl123
    • #4
    • 29th Nov 18, 8:20 AM
    • #4
    • 29th Nov 18, 8:20 AM
    Bought a house that needed work and spent more than we had saved! We currently owe just over 16k but have a beautiful forever home. We didn't want to add costs to mortgage so have 2 zopa loans and 0% cc.
    Always counting down to pay day, but making baby steps getting life on track! Looking forward to cracking the debt once and for all.
    SPC 090 - £69.45 / £500
    • Choccygirl123
    • By Choccygirl123 29th Nov 18, 8:24 AM
    • 259 Posts
    • 412 Thanks
    Choccygirl123
    • #5
    • 29th Nov 18, 8:24 AM
    • #5
    • 29th Nov 18, 8:24 AM
    And had to update car! The books didn't balance and I had terrible budgeting habits!
    Always counting down to pay day, but making baby steps getting life on track! Looking forward to cracking the debt once and for all.
    SPC 090 - £69.45 / £500
    • PoorGuyNextDoor
    • By PoorGuyNextDoor 29th Nov 18, 10:07 AM
    • 151 Posts
    • 379 Thanks
    PoorGuyNextDoor
    • #6
    • 29th Nov 18, 10:07 AM
    • #6
    • 29th Nov 18, 10:07 AM
    The usual scenario goes something like this, get credit card, spend on card, get another card, spend again, repeat numerous times and throw in a few loans, consolidate the debt, repeat the above, sometimes more than once.

    A very general assessment obviously, some people can handle their credit, some canít, throw in a few life changes, and you have the basic ingredients for a lifetime in debt.

    Most people view this as normal, and as long as you can service the repayments, it doesnít become a problem, but you end up working to pay your debts, instead of living within your means.

    Obviously most peopleís storyís are more complex than this, but boil it all down, and we simply borrow more than we can afford to repay.
    Originally posted by sourcrates

    This has hit the nail on the head for me. I think financial education should be taught in schools. Teach them before they have credit available as opposed to everyone getting a self learned lesson years later when they hit 30 and realise they've been in debt since they were 18. Just because the banks are willing to lend you it doesnt actually mean you can afford it.
    A change in circumstances also throws a spanner in the works. Loss of job, off work for a lenghty period of time, breakdown of a relationship meaning you go from paying half the household bills to all of them < all of them apply to me.
    Can now be found in the Millionaire Challenge thread
    • Dolly Rocker
    • By Dolly Rocker 29th Nov 18, 10:32 AM
    • 4,241 Posts
    • 12,325 Thanks
    Dolly Rocker
    • #7
    • 29th Nov 18, 10:32 AM
    • #7
    • 29th Nov 18, 10:32 AM
    Age 18 years and 1 day old gets a call from my bank, how would you like a £1000 loan. My immature brain, why yes that would be great!

    That spiralled, 1 loan turned into more loans and credit cards.

    Loans again to consolidate but still spending over my means.

    Night out this weekend and no money, lets call the bank to extend my overdraft cos that is a great idea.

    Holidays, theatre tickets, concert tickets etc etc etc.

    Basically I was living way over my means for a long time and because I was able to make the monthly payments didn't see an issue with it.

    Now I am trying to be more sensible with money.

    I am 35 years old with no savings but on Friday I will be debt free.

    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

    Dxxx
    Debt Free 2018 £12754.09 - PIF 30.11.18
    Goal Weight in 2019 30lbs/91lbs
    SPC#13 £71.50

    My Home Fund £30
    11.12.18 - 2 Nationwide Referrals available, PM me for £100 to switch accounts
    • jubilee14
    • By jubilee14 29th Nov 18, 11:04 AM
    • 303 Posts
    • 887 Thanks
    jubilee14
    • #8
    • 29th Nov 18, 11:04 AM
    • #8
    • 29th Nov 18, 11:04 AM
    Got cc to use to pay work expenses and claim back. as had access to money just kept using it. Then when expenses came in used it as 'free money' for dining out/ lifestyle choices. Maternity leave shortage of cash supplemented by cc. Got loan to buy car and use rest to pay off debt on cc. Then used up available credit on cc, all within about 10 years by then sitting at nearly 40K debt and struggling to keep up payments and live.

    wasnt anything dramatic just poor financial management of having what i wanted and not paying off when things like expenses came in. Nearly at the end of the DMP road thats BC paid off just two more the loan and the cc ( both who charged full interest for 6 mths and 12 months respectively, if they hadnt i'd be done. Great life lesson and my kids have been taught that no we cant afford a holiday/expensive presents etc so i hope they dont go down this silly road.
    LBM Sept 2012
    started DMP 1.11.12
    Debt £37012/£1440 DFD Oct 2019 about March 2019
    • Mumoffourkids
    • By Mumoffourkids 29th Nov 18, 2:22 PM
    • 702 Posts
    • 3,663 Thanks
    Mumoffourkids
    • #9
    • 29th Nov 18, 2:22 PM
    • #9
    • 29th Nov 18, 2:22 PM
    This has hit the nail on the head for me. I think financial education should be taught in schools. Teach them before they have credit available as opposed to everyone getting a self learned lesson years later when they hit 30 and realise they've been in debt since they were 18. Just because the banks are willing to lend you it doesnt actually mean you can afford it.
    A change in circumstances also throws a spanner in the works. Loss of job, off work for a lenghty period of time, breakdown of a relationship meaning you go from paying half the household bills to all of them < all of them apply to me.
    Originally posted by PoorGuyNextDoor
    I agree it should be taught in schools and my 12 year old daughter was asking me the other day about what expenses I had to pay for the house. I explained all the bills and what I have to pay. She then said But why don't they teach us this in school? I said I don't know but I will teach you how to budget. She already saves her pocket money up if there is something more expensive she wants and she wants to start working to earn a bit more money.

    But financial education should be taught in schools.
    Total debt Dec 2017 £23090.83
    SEP 2018 £0 100% paid
    Emergency fund £257.38/£600
    Total Savings £1672.07
    • Towser
    • By Towser 29th Nov 18, 3:29 PM
    • 1,186 Posts
    • 1,991 Thanks
    Towser
    MMM...

    I see. Well that is it then. I will have to teach my boys about money. I can remember being a teen and a friend of mine, had what I thought at the time was a huge debt at the time. Wondering how they were ever going to pay it back. That is how I learnt about debt and of course my parents never doing credit.
    • Unicorn cottage
    • By Unicorn cottage 29th Nov 18, 3:41 PM
    • 134 Posts
    • 206 Thanks
    Unicorn cottage
    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.
    Following the Martin mantra "Earn more, have less debt, improve credit worthiness"
    • Pixie5740
    • By Pixie5740 29th Nov 18, 5:52 PM
    • 13,371 Posts
    • 19,261 Thanks
    Pixie5740
    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.
    Originally posted by Unicorn cottage
    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.

    • TommyTBFC
    • By TommyTBFC 29th Nov 18, 6:16 PM
    • 4 Posts
    • 6 Thanks
    TommyTBFC
    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. Canít 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
    • nubbz
    • By nubbz 29th Nov 18, 8:03 PM
    • 18 Posts
    • 3 Thanks
    nubbz
    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
    • By Fireflyaway 29th Nov 18, 8:07 PM
    • 2,101 Posts
    • 2,435 Thanks
    Fireflyaway
    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
    • By weeg 29th Nov 18, 8:26 PM
    • 832 Posts
    • 753 Thanks
    weeg
    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.
    Last edited by weeg; 29-11-2018 at 8:31 PM.
    • blue_mango
    • By blue_mango 29th Nov 18, 9:11 PM
    • 411 Posts
    • 1,382 Thanks
    blue_mango
    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
    • By Greta Sharbo 29th Nov 18, 9:15 PM
    • 280 Posts
    • 263 Thanks
    Greta Sharbo
    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
    • By Thick n Thin 29th Nov 18, 9:27 PM
    • 57 Posts
    • 152 Thanks
    Thick n Thin
    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
    • By bertiewhite 29th Nov 18, 10:37 PM
    • 1,379 Posts
    • 1,566 Thanks
    bertiewhite
    Getting divorced did it for me.
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