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To think a lot of people must have a high amount of debt

(248 Posts)
user495827 Thu 25-Jun-20 17:26:13

I wouldn't dream of being nosey enough to ask people in real life. So thought I would ask on here. I'm asking more from people with average incomes rather than very high. When I say average I suppose I mean around £20000 to £35000
I'm from the North West which I think is relevant as the average house price /wage is lower than the South.
A lot of my friends and their partners are in this bracket. They seem to spend a lot of money. One friend, for example, got married last year a beautiful wedding easily £10000. A honeymoon to Dubai and also a mini moon to Paris. Beginning of this year they bought a house and are completely renovating it top to bottom. I happen to know her salary just through conversations is £25000. Her husbands job probably pays around £30000. Another friend again completely renovating a new house. Both have Audi's cars on finance.
AIBU to think a lot of people spend like this now and that it is normal to have very high debts/high mortgage?
I know it's not my business I certainly don't begrudge them and how they spend their money. I use to earn similar but im now part time and I suppose I'm abit of a saver.

OP’s posts: |
OnSilverStars Thu 25-Jun-20 17:31:31

We have £9000 on a credit card

I owe £12,000 in student loans

We have a mortgage for £260,000ish

We lease a car.

We have a combined income of £110,000ish per year

We have over £10,000 in our bank account but are happy having low interest debt and keeping cash in the account

Timeforabiscuit Thu 25-Jun-20 17:32:31

Honestly, people have windfalls, early (sometimes tragic) inheritances, help from family, or are actually extremely well paid.

Others are excellent at managing money, stretching food budgets, holiday deals, doing lots of research of the most cost effective offers

Others spend like they have 6 months left to live!

Nonononon Thu 25-Jun-20 17:36:52

I have in £2000 debt left (car) and a £300 overdraft that I have pretty much lived in since I got it.
No mortgage as I rent.. and given the anxiety that the car has given me (finance) I'd never want a mortgage anyway.

B9008 Thu 25-Jun-20 17:39:43

I think a lot of people do have a lot of debt now because it is cheap to service.

A lot of debt is covered by asset though.

I wouldn’t worry for example if I had a £200k mortgage if it was funding a £400k house.

Can always sell up or sell cars.

Some people do have ridiculous levels of debt though and I don’t know how they sleep. My sister owes £100k on
Top of her mortgage.

ComtesseDeSpair Thu 25-Jun-20 17:45:26

Debt is only really a negative thing if it’s unaffordable. If people can qualify for good interest rates and afford the repayments, debt is a perfectly sensible way of financing things. For example, I renovated my home using a 0% loan which I pay off at a few percent of my monthly income. I barely notice it. The alternative would have been saving for a couple of years and living with bare concrete floors, a mouldy bathroom with no shower and a greasy, decrepit kitchen in the meantime. It was a no brainer.

People may overstretch themselves but I really don’t think it’s as common as debt-averse people think. You can’t just borrow huge amounts of money at will - you need to earn enough to qualify for a loan and make the repayments so it would become obvious relatively quickly if this wasn’t the case.

Perhaps your friends have had family help, or a small lottery win or savings, or actually earn more than you think they do.

Subordinateclause Thu 25-Jun-20 17:45:41

We earn modestly but have put a lot into our house. I know our neighbours wondered how we did it. However, I've barely spent on meals out, clothes, holidays etc for the past 10 years and I think that really does add up.

Rainycloudyday Thu 25-Jun-20 17:47:39

We have a combined income of about £80k. Mortgage £225k but house worth at least £550k. £22k owed on personal loan taken out to fund work on the house which added c. £50k in value. No credit card debt. V little savings currently (£3k) ish as wiped it out on house improvements but building it back up from this month. I’m keen to pay the loan off early next year, not a fan of unnecessary debt. Had a car loan but paid it off early before DC1 was born. V fortunate position I know but we’re generally sensible with money and live within our means.

Toughtips Thu 25-Jun-20 17:49:24

I have 10k at the minute. Wacking 500 a month off it tho to have it gone. Hate it. We also have a 216k mortgage combined household income of 67k.

HilaryBriss Thu 25-Jun-20 17:50:39

I earn c£22000 and owe about 2K on my credit cards. I have enough in my savings account to pay this off if I want (though it would pretty much wipe out my savings). That said, I drive a fully paid for Peugot 107, not a financed Audi so no flash car. I also have a mortgage but am not counting that as debt.

MissConductUS Thu 25-Jun-20 17:51:59

We own our house and cars free and clear, no cc or other debt. But we're in our early 60's, both relatively high earners and DH is a diligent and knowledgeable investor. And we live well but not extravagantly. I got a new Subaru recently - a very nice car but not expensive.

Our biggest financial challenge now is having DS in uni and DD about to start uni in August. We're in the US so uni is insanely expensive.

Marmite27 Thu 25-Jun-20 17:52:12

Combined income of £65k. Mortgage £70k. DH has about £15k in his sole name, I have about £300.

Yankathebear Thu 25-Jun-20 17:52:34

I’m in that bracket. No debt but don’t own our house and struggle with savings.
I would survive two months without pay.
Debt scares me.

foreverblowingbubbles87 Thu 25-Jun-20 17:52:57

The only debt I have is my house which is about £90k. I own my car though as I think leasing is such a waste of money. I didn't go to uni so don't have student debt. I have savings of £12k. BUT i have just been made redundant so I'm glad of the above and if I need to then I will be taking out a loan or getting a credit card IF I don't get another job soon smile

TheClitterati Thu 25-Jun-20 17:53:07

apart from mortgage I have about £1200 on 0% credit card.

I do need a new (2nd hand) car soon but I won't get into debt for it.

bridgetreilly Thu 25-Jun-20 17:53:09

My salary is in that bracket. I have about £7500 to pay on a car loan. Other than that, no debts, and about £4000 in a savings account. I would not want to be worrying how to make monthly payments on any higher debt than that.

3ismylot Thu 25-Jun-20 17:58:02

I definitely think that credit and debt are more normalised these days. People prefer to have it now and pay later. I personally prefer to save first and have later, however, this is not always possible and we have had credit in the past.
We were lucky enough to inherit enough for a good deposit on our house, so our outstanding mortgage is around £99k on a house valued at around 330k, we pay our normal credit card off in full every month and do have about £5k sat on an interest-free credit card deal that we pay down each month but we also have around £20k in savings, so can pay it off at any point. I had a decent second hand car (10k) just before lockdown and DH will need a newer car in the next year but we will buy outright rather than lease.
DH earns around 45-50k a year and I have been a student for the last 4 years (just about to finish my degree). We are not particularly frugal but we do not have many takeaways, cinema trips etc and have not had many family holidays but our 3 children have been on every residential offered so far.
I think its a mixture of people having help they do not advertise, using credit wisely and those who live beyond their means really, everyone has different priorities in life I suppose.

vanillandhoney Thu 25-Jun-20 18:00:38

Between us we earn circa 40k. No debt apart from the mortgage. We own two second hand cars and have holidays each year.

Our mortgage is incredibly low and neither of us have expensive hobbies. We do have a dog and three cats as well. Yes, some people have debt but a lot of is down to lifestyle choices.

Greydove28 Thu 25-Jun-20 18:04:38

You sound jealous and its not a good look!

raspberryk Thu 25-Jun-20 18:13:17

We're on much lower incomes and we have no debt at all, next year we should have a mortgage. Debts other than a mortgage scare me to be honest as I know how quickly circumstances change. My ex was a bugger for credit cards and loans, generally I either save or go without.
I never put anything on my credit card that I can't pay back in a few months. I sometimes use it to pay my car insurance or home insurance up front and pay off in 2 or 3 months which when I do it with anything we might ordinarily pay monthly does save quite a bit of interest.

crazychemist Thu 25-Jun-20 18:15:32

Yes, lots of people have large mortgages now. It’s not a great position to be in, but it’s not terrible either - you just pay it off every month and then eventually it’s gone!

I don’t think it’s a good idea to run up lots of avoidable debt. I’d much rather save first than buy cars etc on finance (we have a very cheap 2nd hand car, I love it!). We don’t have anything on credit cards at the moment, but we have used them in the past to get through short-term issues (I don’t mind doing this if it’s something we couldn’t have easily planned for and I KNOW it’s going to be short term). Some people have no choice, due to job loss/illness etc. But I think a lot of people run up debt that they don’t need to and don’t think much of it.

Scion286 Thu 25-Jun-20 18:18:48

We have a combined income of £40k. Our mortgage on our £180k house is £16k. We have a holiday abroad once a year and £25k in savings. I’m 39, DH is 42 and we have one child who’s 12. We’ve always got around £500 on our credit card which we pay off and put back on again every 6 months-ish. We also have our sofas on 0% finance and our new carpets.

Footsanitiser Thu 25-Jun-20 18:19:17

apart from our mortgage, (which about 7% LTV) which we hope to pay off next year, we have about 6k on various credit cards, (train season ticket is the biggest expense on one, and smaller expenses on others) . Most of them 0%, and we prioritise paying against the ones that aren't 0%. Our cars are both 10 years old + and we have fairly modest holidays for 1 week per year. Once we pay our mortgage we will aim to clear the credit cards completely.

SayakaMurata Thu 25-Jun-20 18:22:25

We have no debts and no mortgage.

I don't want to use credit to buy things, I would rather live within my means, save up or do without.

I do realize though that I am lucky to be able to have that attitude. For example we bought our house with a cash gift (£300,000 about 10 years ago), our cars were either bought with cash (my DHs) or were a gift (mine). And we earn or have inherited enough to pay for the things we want.

However when I was younger and poorer I had the same attitude about credit and debt.

Waiting42021 Thu 25-Jun-20 18:22:55

DH and I earn £70k combined.

At the moment, our only debt is our mortgage. We were lucky enough to cover most of our house renovation with savings but we still have more to do.

I think we will end up taking on some manageable debt to finish off the rest of the work. However, we don’t have cars on finance, and we only go on holiday if we can afford it (without a credit card). I’ve always felt uncomfortable with having high levels of debt.

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