To be annoyed that dh referred to us as poor.

[Maisykitten]

hi everyone,

dh and I have some ‘tricky’ finances at the moment. Our business went bust when Covid kicked in and we were left deeply in debt (100k now but more at the start ). We have both managed to get good salaries jobs and we’ve got on top of everything.

we have a small mortgage of 38k on a house worth 300k and all of our bills are paid. Definitely not remortgaging to clear the debt- the house is our security!!

anyway in a conversation dh referred to us as ‘poor’. I have a real issue with that. I agree that we’re in high levels of debt but we aren’t poor. After we’ve paid our mortgage, bills and living costs inc contractual debt payments, we’re left with £2800, much of which goes on extra debt payments.

i think it’s tone deaf to call us poor. I don’t feel poor, in fact i thank my lucky stars everyday that we’re able to dig ourselves out of the hole we are in,

do you agree?

You have a debt of 138k including your mortgage and an income of 110k, no you are not poor

I’m surprised/ jealous you managed to get an unsecured loan of such an amount on 0% interest. What lender is this if you don’t mind me asking? When I was looking at a loan for a renovation a couple of years back (yes peak interest rates I know - crap timing) I couldn’t get anything less than 9 or 10%.

I'd guess it's the residual debt under an IVA or similar debt relief scheme.

They are categorically not poor. It may, subjectively, to the husband feel that way, but purely objectively:

• they can comfortably afford their mortgage
• they can comfortably afford their debt repayments
• they can put, on average, an additional £2k/month toward those debts
• their assets are worth way more than their debts
• they have no need to use food banks
• they are not remotely at risk of losing their home

It's undeniably a lot of debt when viewed in isolation, but to refer to it as "poor" is at best tone deaf. Remember we live in a society where far too many people are struggling because of low earning potential vs insane rents and cost of living. £110k income puts you in the top 10% of earners in the UK.

Someone once posted this link on MN and frankly, it's pretty eye opening. It's a questionnaire where based on your income and spending you sit on the wealth scale of the UK.

https://www.ons.gov.uk/visualisations/dvc1802/calculator/index.html

That link was really interesting thank you.

I wouldn’t say it’s a lot of debt, they have a mortgage if 38k and a debt of 100k so 138k in total their home is worth over 300k better financial situation than a lot with a regular mortgage 🤷‍♀️

Median total wealth in the UK is £125,000.

So, you are in the 5th decile for wealth and the 9th decile for income.

Hopefully your DH will realise quite how lucky you are.

I am still confused how you managed to get into debt from a business. Wasn't it a limited company?

https://www.statista.com/statistics/813364/average-gross-income-per-household-uk/

I think that it's a question of terminology. You are equating the word "poor" with how you perceive your financial situation compared with others in your country. He is probably using it to express how he be feels compared to your own situation a few years ago.

They are making repayments to their creditors according to the agreed terms and then adding overpayments to clear it faster. If OP meets the terms of their credit agreement it's nobody's business but their own what they spend the rest of their money on. The creditors would probably pefer that they don't make overpayments as then the loan would be paid back more slowly and they earn more interest. They did not declare bankruptcy!

I mean, with that reasoning anyone with a mortgage should just go and sell their house to immediately pay back their mortgage lender in full and live on the streets. Not a great business model for the mortgage lenders though!

I don't think your poor in the sense of having to worry about buying food etc, however I think your husbands feeling are validated in that your nearly 50 and have over 100k of debt and only £800 disposable income a month after extra debt payments. This is by no means poor but he may feel that it is compared to your previous lifestyle. Its also not a lot of time to clear the debt and build pension pots before retirement age

Invisible money and useless for the present. The expensive hoise isn't going to put food on your plate each week. You can still be poor even if you invest.
This person is paying a debt. Forget the house.....they owe 100,000 and that's not for rhe house! That's a debt with nothing back. The house isn't paid off yet either, and if her husband got ill and couldn't work and couldn't pay these bills and debts....that house will get taken off her. She's then very poor.

He is clearly correct when saying they are poor

I would 100% remortgage, pay the debt off and start fresh. I'm a low earning, single mother with a mortgage of around £130,000, the repayments are less than £700pm. I'd rather have the extra mortgage payment. Is the issue that you can't remortgage because of the huge debt?

Try warning minimum wage then you can say you are poor. You're left over income is what hubby and I earn between us per month. You are very very lucky (I know you know, pass that onto your husband!).

You should never turn unsecured debt into secured debt. If you lose your job/ get ill you lose your home if you can't pay the mortgage.

Very easily unfortunately. Lots of people use personal debt to.prop a business up because they are desperate to save it. Some business loans have a clause that they are not included in the limited guarantee. So you can end up with debt despite it being a limited company.

You'd be pretty foolish to and is a good example of why most people on this thread dont seem to be recognising that OP's partner is incorrect in what he says (given that lots of posters seem to think that a mortgage debt is ok, but other debt isnt).

This is not a thread with a lot of financial literacy in it.

No you're not "poor", even if like others say because you're paying down your debt you "feel" poor.

Sensibly, you're prioritising paying down that debt leaving little for luxuries. That doesn't mean you're poor, it means you're prioritising spending cash on something else - just like if you're ploughing that cash into your pensions or savings or just for a big blow-out holiday but don't have the cash available doesn't mean you're poor.

It would irritate me too. I have a friend like this who is always claiming how broke she is - what she means is she's putting away £500 a month into savings for a holiday and spending £300 on a leaseplan car - make different decisions and you'd have at least £800 spare!

Is he trying to tell you he is depressed? Do you both have a pension pot?

Something is dragging him down and making him feel poor. There must be a reason for that, and you could both sit down together and discuss it. That is not an easy thing to do, because life isn't that simple, but unless you do, how will you know what is worrying him so deeply?

It could be that he thinks the debts should be paid off faster, and that some aspect of your expenditure could go to paying the debt instead of whatever you are spending it on.

I went to the Citizens Advice where I live. Their experts give their time, and they really are skilled at helping people with money problems. They made me out a whole budget. They need two years of bank statements and credit card statements and how much it costs to run the house - utilities etc. and they will tell you how you can improve your life and give you encouragement. Even if you earn good salaries, it doesn't mean you don't need help.

If you've £2800 spare money at the end of the month that you're using to clear off some debt I don't think you're poor.

You don't say how old you are but if you owed £138k on a £300k house and you were paying that and your bills I defo don't think you're poor. And you are lucky that really £100k debt hasn't crippled you as most people would be risking their home and even bankruptcy with that debt suddenly arising

However as the £100k is a new debt based on a business failure I can see how hubby would "feel" poor comparatively

Running your own business is hard. You have to take (calculated) risks. I’m so sorry this has happened to you. It must have been devastating at the time. Congratulations on paying off a fifth of the debt so far and well done on getting two well paid jobs. Your attitude is great. You’ve got this and the learning experience will have been hugely valuable. You’ll look back on this time and wonder how you did it. How long will it take you to clear the debt?

FFS! Op has already stated numerous times that they are spending the majority of their disposable income on additional debt repayments! Jeez!

I agree with others. You should allow your husband to speak openly to you about his experience without policing his word choices. I agree that perspective is important, but he’s also allowed to feel how he feels.

There’s a lot tied up in the failure of the business. You’re both grieving, there’s a sense of failure, maybe also some regrets. You mentioned feeling shame. You’ve lost your dreams and the life you thought you’d have.

You’re obviously not poor, but you feel poor because you’re a slave to those debts. They are weighing you down and holding you back. That money could be going towards a nicer lifestyle or building a better future. Debts suck the joy out of life and trying to get out of a lot of debt is a long and really stressful process - I know from experience!

Be compassionate with each other and focus on working together to get through the shit as a team. You can then massively appreciate how far you’ve come when you’ve clawed your way out of this. Hopefully you’ll have learned things that will help you in the future. Onwards and upwards!

He is clearly correct when saying they are poor

Not if they have £2800 disposable income after paying all their bills including agreed repayments. They can overpay 4 figure sums monthly, even when they have other less frequent costs crop up (such as car repairs etc). They could still go on holiday without compromising their agreed repayment plan.

Poverty is struggling to make your money last until the next payday. Wondering how you are going to pay for your car repairs. Needing food banks. Unable to keep even a small pot of savings. Having £2800 left after everything has been paid isn't poverty. They have an asset worth more than £150k after you've deducted the outstanding mortgage and £100k debt.

Objectively this cannot be classed as poverty. The facts make that quite clear.

PS Like your husband, I currently feel poor after being fucked over by a builder, even though we have no mortgage. We now have to pay back $80k in debt instead of being left with a $100k buffer, which is what would have happened if he had honored the contract. However, such is life! We are budgeting like crazy. It’s long, it’s boring, it’s stressful and it’s very unenjoyable, but in a way we’ll appreciate it all the more once we’ve got to where we would have been. And we do know that while we spend every day stressed, it could be a lot worse and we are actually very lucky in the grand scheme of things.