What did you do to get into debt?

Towser · 28 November 2018 at 11:13PM

I am curious what did you do to get into debt? How did it happen?

[purplesignup][/purplesignup]

sourcrates · 28 November 2018 at 11:33PM

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 can’t, 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 doesn’t become a problem, but you end up working to pay your debts, instead of living within your means.

Obviously most people’s story’s are more complex than this, but boil it all down, and we simply borrow more than we can afford to repay.

Towser · 28 November 2018 at 11:51PM

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 · 29 November 2018 at 9:20AM

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.

Choccygirl123 · 29 November 2018 at 9:24AM

And had to update car! The books didn't balance and I had terrible budgeting habits!

PoorGuyNextDoor · 29 November 2018 at 11:07AM

sourcrates wrote: »

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 can’t, 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 doesn’t become a problem, but you end up working to pay your debts, instead of living within your means.

Obviously most people’s story’s are more complex than this, but boil it all down, and we simply borrow more than we can afford to repay.

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.

[Deleted User] · 29 November 2018 at 11:32AM

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

:p:p

Dxxx

jubilee14 · 29 November 2018 at 12:04PM

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.

Mumoffourkids · 29 November 2018 at 3:22PM

PoorGuyNextDoor wrote: »

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.

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.

Towser · 29 November 2018 at 4:29PM

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 · 29 November 2018 at 4:41PM

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.

What did you do to get into debt?

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