To wonder if we have a lot more debt?

[Noseytoday]

We have £7k of debts, mixture of major house repair work, holiday, getting pregnant much quicker than expected and so not having long to save for maternity leave. We are now focusing on paying it off each month and its going down but it really stresses me out. My DH isn't as worried, he thinks a lot of people probably have similar. Does this sound fairly normal or not?

People shouldnt be scared or worried by debt, providing it's manageable and affordable then debt isnt a bad thing.

If you're not paying interest on it (such as 0% credit cards ) it really doesn't matter just do not miss the minimum payment

Apart fro mortgages, nothing.

We put as much of our spending as possible on the credit card, as we get 1% of it back in vouchers. But it's paid off in full every month.

I haven't RTFT but I reckon I'll be in the winning for the most debt...

About £68,750

2 x car finance, £4K credit card and about £750 left on 12 month interest free loan on sofas

TBH I'm not remotely stressed about it.

We can afford the monthly payments...

...and if we're counting mortgages you can add another £485k to that!

To OP

As long as the repayment of the Debt does not result in a poor standard of living I would not be too bothered. £7K at today's interest rates is not a lot unless you borrowed from a loan shark type organization?

Many young people leave University with over £50K of debt! Makes your £7K look small.

To the posters saying that their debts are manageable, getting 0% interest deals, have decent incomes, could pay more if they wanted to... Do you never plan to be I'll? Have an accident? Adulterous partner? Bereavement? Banks refusing you to roll over to a new deal? Redundancy?

There are so many unknowns that control your financial position it's fragile to mistakenly believe that all is well simply because the sun is shining on your particular setup...

We just have the mortgage that we are trying to clear sooner. Dp is self employed, I've been made redundant before... any debt doesn't sit well with us. We have taken 0% loans, 0% credit cards and borrowed mortgage reserve in the past to fund building works, and paid them off as soon as we could. We don't have fancy cars like we could have with car finance, and I guess we live more frugally than others, but this way we feel more relaxed.

genivert
You make a valid point. In our case our savings are multiples of our debt and we have other income streams, critical illness cover, life assurance, and a substantial amount of equity.
I would not be comfortable if I didn’t have the ability to survive a crisis.

@MarthaArthur

I have the same as you. Worries me endlessly. I have never missed a repayment and is all interest free at the moment but so t have much spare to clear more than the minimum.
We have a good joint income but with mortgage and childcare plus essential bills not a lot spare!

Not all debt is "bad" though. We are currently planning a new kitchen. We could either pay the whole amount of about £20k upfront, or pay 10% deposit and take the rest over 5 years interest free, paying £300 a month.

Now that sort of arrangement is a no-brainer. You're paying no more overall, the monthly payments are more than manageable. Totally different to taking money on a loan and paying interest on it.

Apart from that we have no other debt though apart from the mortgage, which is far less than the value of the house.

Hmm we have finance on a car for the household and for kitchen renovation. That’s about £16k all in. Then about £800 being paid back on a 0% card for the additional stuff we’d needed for the kitchen.

Before entering into the finance agreements we’d checked whether we could afford the repayments, and the big debts are to help ie reliable car means I was able to go for a promotion at work which involves more travel, and the kitchen adds value to the house. Also fortunate that our employers offer good sickness pay etc for illness just in case.

I’d feel really worried if I was only meeting minimum repayments each month or if we were using credit for day to day living expenses.

@genivert you are 100% correct and it is that that worries me. We have a lot of house equity and that is a blessing and a burden because if it all went wrong you are more likely to be persued

Apart from my student loan and mortgage I have no debt. I had a £2000 debt for a while but paid it off as it was really stressing me out.

I’d worked hard to get my credit down as low as possible then fell pregnant unexpectedly after 4 years infertility. Then the car broke and we had to replace it, and we chose to use the money we had saved for our holiday to cover mat leave so I could have the full 12 months. I’ve put a few bits on credit cards over the summer holidays to take my children away for a few nights etc. I’ll go back to work next week with about £6k of debt, including car loans, loans for home improvements, student loan and credit cards. I have a bit of disposable income when I go back to work so am working out which have the highest interest rates to pay back first. They should be paid off within 12 months, possibly 18.

@genivert

To the posters saying that their debts are manageable, getting 0% interest deals, have decent incomes, could pay more if they wanted to...
Do you never plan to be ill? full sick pay from work
Have an accident? full sick pay from work
Adulterous partner? sofa 0% credit is in his name so i would just continue to pay my half. We would sell house, take our equity and buy somewhere else each. I can still afford my car loan payment.
Bereavement? life insurance payout
Banks refusing you to roll over to a new deal? banks always want your money
Redundancy? basically 0% chance where i work but then i would have redundancy payout and get another job

Why are you presuming no one here has thought about all of these things?

I’ve got a student loan which I pay back about £13 a month to and the mortgage. Of course these are debts, but I think of the student loan as a graduate tax. The mortgage will be paid off in 10 years and there’s enough equity in the house that I could buy a small flat cash after selling the house if the worst happened.

When I was little my mum was so incredibly poor after she fled a DV situation. My DB was too old for us to be allowed in a woman’s aid so we stayed in horrible damp cottages and burned our furniture to keep warm.

Mum thankfully is now very financially secure and I’m terrified of not having savings so apart from the above would be sick with worry if I ever had debt.

7k really isn’t much OP.

It really, really is, unless your wealthy. In which case you wouldn’t have it as you’d have the means to pay it off.

£7k is a lot of money to owe, i always think of debt as ‘if I won or was given a bonus of £7k, would that feel like a lot of cash? Of course’ so if I’m in £7k debt and get an unexpected windfall I’m back to zero. Which is better then debt, but still, how awful to know so much of your income or any windfall is swallowed up just repaying money you owe.

Astounded at people comparing thousands of credit card debt to the larger amount students graduate with as if it’s the same thing! It really isn’t. Debt from university is a really different kettle of fish. You only repay it once you earn a certain amount and even then it’s in line with your income. It has no bearing on anything else, it’s not included in credit score calculations, and more importantly you have something to show for it. I graduated with £20k debt and that qualification has enabled me to go from jobs earning maximum of min wage to jobs paying me £30-40k before the age of thirty (which I know isn’t a lot to some people but to me I consider that a great salary, especially considering the average in my area is £16k and my OH is on the same as me too).

I’ve been in debt so I’m not coming from a position of privilege here, my debt was accrued because it was either that or be on the streets, during being seriously ill and unable to attend work sporadically for a long time with no family support and no entitlement to any benefits. I didn’t have a choice, but it’s crazy to see people so blasé about racking up thousands of pounds for things like carpets, holidays or kitchens!

Is this a sign of how much we have been trained to see debt and owing money as just a normal everyday thing ‘we all have’? Or is it denial from some people because they too had no real choice in accruing it and it’s just a case of getting on with it?

This thread is really extremely eye opening.

Lazypuppy is your workplace offering full sick pay indefinitely? That’s amazing. I consider my workplace to be very generous with five months at full pay and then five months at half pay.

I got seriously ill in my late teens and early twenties and it spiralled into being in significant debt I couldn’t repay (£7k) and a DRO (bankruptcy) as I was too poorly to be at work (managed to keep my job by the skin of my teeth) and ran out of sick pay with no family support or entitlement to any benefits. I’m very aware that anything can happen. I’m debt free now and working on an emergency fund as well as saving for a property. I’m at one month’s expenses so far in the emergency fund.

I hate to bring up the "b" word, but I feel a real need to clear some debt before next April.

My mortgage is on a very long fix but I'm worried my unsecured debt potentially could become much more expensive, and that maintaining my current standard of living with regards to food, wine, clothing and cars is about to become much harder.

I'm not knowledgeable enough about economics to know how likely this is, I'm just reading the news, threads on here and waiting for some definite reassurance from the powers that be.

It's interesting seeing different views about money and debt.

I have student loan (about £16,000), which I try not to stress about as it only takes between £50-100 off my income each month, and I know it'll get paid off/written off by 2035.

My friend has £5,000 in credit card debt, no major purchases, just used it to tide her over each month. She was very chilled about it because as she was making the minimum payment each month, it was okay in her mind. I was shocked when she told me about it so calmly, but then explained that by making the minimum payments each month it would take her 19 years and 3 months to pay it off, and cost £8,305 in interest. She has moved it to a 0% interest card, and is making fixed repayments so should be paid off in a couple of years.

Debt is okay I guess, if it's manageable and you've got a long term plan to get out of it.

But making the minimum payments of credit cards every month is dangerous!
www.moneysavingexpert.com/credit-cards/minimum-repayments-credit-card/

Thanks for all the replies, really interesting to hear all the different perspectives and thoughts on this. I was hoping for confirmation from others that it should be our top top priority, not for platitudes about debt being normal by the way! So we agreed a more concrete plan last night for paying the debts off, we have 0% deals that end at varying points over the next 2-3 years but will be able to pay each one off before they end, so no more balance transfers.

We live quite frugally as it is and the debts was mainly unavoidable (early mat leave and house repairs; yes the holiday was foolish in hindsight as we should have had savings before committing to it, but in reality paid for using a cc as we would normally for payment protection, but then house repairs came unexpectedly soon after).
However this has inspired us to think of more ways to cut costs and pay back even more, quicker. So thanks all.

Good luck OP. Stepchange are fab if you need support.

I was hoping for confirmation from others that it should be our top top priority, not for platitudes about debt being normal by the way!

Quite. Quote of the thread for me was definitely People shouldnt be scared or worried by debt, providing it's manageable and affordable then debt isnt a bad thing, I don’t even know where to start with that. Such a dangerous attitude!

It might be common but it doesn’t mean it’s not a bad thing or something to avoid at all costs.

I think a carpet is worth getting into debt for. If you cam afford to pay it back monthly.

Surroundings really affect my mood and I hate cold feet.

Could understand if it was new clothes and partying.

Though I probably would get into debt for a holiday if I could repay within a year.

Car £3k left to pay and £2k low interest loan. I had a high interest credit card a few years ago when I had poor credit and lower income and struggled to pay for Christmas. The £2k is a U.K. holiday and 2 Xmas’s and some car repairs. When my credit file repaired itself this year the first thing I did was Move it To a low rate loan (couldn’t get 0% but it’s low) and paying it off in 1 year.
Car £ was a loan from a family member and is no interest at £100 a month.
I recently took on more work (60+ hours) and am single parent to try get some savings... in one month I have £400 saved.
No point paying off family loan as no interest on it, £2k loan will be paid off in 10 months

I haven’t increased my outgoings so the £400 I have saved now and continue to save up is all for Xmas, car repairs and emergencies so I don’t have to ever use a credit card again!

Next year I will have to probably get a car on finance (mine is awful) and will try pay off family member sooner

No mortgage