Adult son and wife have significant debt and I am worried

[Housecoat1]

Hi everyone,

my adult son (30) and his wife have money issues and I’m so worried. They have professional jobs and a good income however they’ve fallen into credit card and loan debt.

I’ve now learned that they owe £47k in Loans and credit cards. I just can’t believe that can be true? How is that even possible?

How on earth do you know this, OP, have they asked you for money?
They're adults, they have to work it out, and I suggest you stop discussing their finances with them.

Not really, I'm of a generation where you saved up if you wanted something, or made do. Unfortunately nice cars, big TV's and summer holidays are seen as necessities rather than luxuries by many these days.
2 car loans or a new kitchen and a nice Summer holiday on a credit card could easily add up to £40k +

Difficult to comment on how it's even possible without knowing whether they had a run of bad luck with expensive things going wrong, or whether they have champagne taste on a beer budget ! I wouldn't be able to sleep but understand that sometimes life chucks curve balls at you.

I think the self righteous posts are showing how old fashioned/out of date a lot of people are.
The mindset that any debt outside of a mortgage is bad, is as irresponsible as uncontrolled spending. Both show poor financial management.

There are lots of sensible reasons why a couple could be in £50k of secured debt.

I've always had debt, initially 0% on CC to pay for every day spending because of an exceptionally attractive uncapped work pension scheme 20yrs ago.
Then a low interest loan to improve my deposit on my first house purchase. The difference between the loan interest and the mortgage % secured meant i was significantly better off.
At the moment I have over £70k of debt, all invested in various avenues that are delivering far more than the balance transfer fees.

Its hilarious how blasé people are over a £300k 25yr mortgage but £30k of unsecured debt is the end of the world.

Op has provided little context, frivolous spending on luxury items= issue and poor money management
Considered financial planning = good on them

I'm not sure it's "self-righteous" to think that most couples in their twenties shouldn't have almost 50k of debt

And I would never, ever get a mortgage for 300k. Our house is worth less than a quarter of that 😂

That’s a lot if debt, and more than many people earn in a year. I’d be concerned as well.

Is there something tangible for that debt - a new car? New kitchen and appliances?

That is shockingly prejudiced and judgmental of you when you don’t seem to know the facts.

1. Pair of incredibly naughty kittens managed to block the sink and turn the tap on. This resulted in the kitchen ceiling below collapsing. By the time everything was rebuilt and redecorated and floored, it was a huge bill. Their insurance didn’t pay out for Evil Feline Behaviour
2. Not everyone has money left over for significant savings given COL crisis. Or savings could have been wiped out the month before by needing new boiler for example.
3. That is a very personal decision I wouldn’t pass judgement on.

It is up to the couple how much debt they feel comfortable with, but OP shouldn’t feel obliged to put her hand in her pocket if she is unwilling or unable to.

Hardly. Without a mortgage or a disaster - which OP would presumably have mentioned - £47K is a significant amount of debt, "privileged" or not

How is that prejudiced and judgmental ?? as i have said, it's hard to know when OP hasn't given any info (none of us know the facts). They could have had a whole load of bad luck or emergencies and sometimes you have no choice. It won't take long to ramp up that amount of debt. They also could just spend more than they earn. My point to the previous comment is that £47k of debt probably isn't that difficult to reach in this day and age.

As OP hasn’t returned, we may never know. Of course her DS isn’t obliged to tell her what could have caused it, so she may be genuinely unaware of something major 🤷‍♀️

And I think that shows how out of touch you are.
A £75k mortgage isn't getting many onto the property ladder. Average first mortgage is now around £200k.

It is manageable debt? Can they afford the repayments?

debt isn’t always bad. I have similar in credit card debt, built up over the last 10 years or so. House improvements, new car, odd holiday etc.

it might be shocking to some, but it’s all on interest free cards. So no point paying it off, it sits in the background being chipped away at, while I put as much as I can in a high interest savings account and isa’s.

I could remortgage and pay it off, but that would cost me nearly 5% a year, so the cc debt is cheaper than a mortgage.

if they aren’t paying huge amounts of interest and can afford the repayments it’s not a big problem.

Do they have kids or pets?
These days, I can see how £47k of debt might arise.

For example:
Handbag £1k
Watch £3k
Holiday £6k
So already £10k gone

Cost of wedding and honeymoon? That could make up the entirety of the rest
and you can go on

car £20k
boiler £3k

Of course it isn’t sensible to spent the amounts I’ve put above, but social media makes it seem like many people are.

Not to mention student debt

If they’re earning good salaries and they used a loan to, for example, buy a new kitchen and new windows, and they’ve put a holiday on the credit card, then that’s not so bad. That’s managed debt. If they have £47k racked up on high interest credit cards and it’s to support a gambling habit and day to day living expenses then I’d be worried, because that debt will only increase.

Well, a house identical to ours (just down the road) sold in July for 50k, so I don't think I'm particularly out of touch. I obviously know that many people live in more expensive areas but that doesn't make my experience any less valid.

A 300k mortgage is so, so far out of our reach that it's not something I could ever even dream of.

God thats crazy, would people seriously spend that on a handbag, watch or car??
We have a combined income of about 120k but choose to only have 1 car, go on holiday once a year etc I think its mental people spend so much money on material things.
Ive a friend with a similar household income but up to their eyes in cc debt and already been bailed out by parents and its so telling how different our attitudes to money are. They think its impossible on their salaries to put ANY money away for their child but eat out constantly. Sorry but anyone in this sort of debt (except student loan or mortgage) at that age is a choice and a stupid one.

If the only choice was that much debt then it would be PTS for me

I'm not blase about a 300k mortgage. it's a horrendous amount of debt to be in.

I am in agreement with you about a handbag and watch being silly things to go into debt for, but cars are very expensive now, 20k isn't much of a budget at all, especially if you need something bigger than say a Corsa.

20k is a huge amount to be spending on a car.

I honestly feel as though I live in a different world to most of MN sometimes.

You would struggle to buy a basic two bedroom flat for £300k where I live (not London but SE)

A PP said she could buy a house for £50k where she lives. That’s how much I bought a beautiful Victorian terrace for in 1996. Worth about ten times that now.

You might struggle to buy a basic flat for 300k but that doesn't change the fact that it's an absolutely ridiculous amount of money.

We moved to where we could buy a 50k house because 300k was just insanely out of our reach (and still is, a decade on!).

What kind of budget would you have then and when did you last buy a car? They just seem to have climbed massively in price since covid.

We got absolutely stung by a really awful (unsafe actually) second hand car a few years ago and it made us really wary of spending too little, because we're not mechanically minded and really have no way to judge whether a cheaper car is actually a good deal vs should have just been scrapped. So we tend to look at cars which are newish or don't have too much mileage, but even then it feels risky because you can get a couple of years in and they need an expensive repair. We just ended up leasing last time because at least the cost was fixed over the lease period so we could budget for it.

We don't have a car at the moment because I agree, it's a lot of money that we couldn't justify continuing to spend, but we are fortunate to be able to manage with a combo of cycling, public transport and car sharing (which is excellent where we live). If that was not the case then we would need a car and 20k would be a bit too low IIRC for what we were looking at last time, which was a couple of years ago.

My car was 3rd hand and cost less than 5k during COVID. DH bought a 3rd (or 4th?) hand one a couple of years ago and spent around 4k. We both bought from a dealer.

A quick search tells me that that same garage currently has a second hand Kuga (has an example) for less than 7k or a smaller Fiesta for less than 4k.

20k is just so far outside what we could afford to spend that it wouldn't even cross my radar to look at cars in that kind of price range