To think apart from mortgage it is possible to live debt free!?

[Moneytalkone]

Just that really, AIBU to think that it is possible to live debt free, that debt isn’t a necessity in life! Apart from a mortgage I suppose if you want to own a house. Had a chat with a friend who claimed that debt is given these days, it’s almost an accepted/expected part of life? What do you think?

People really should take a moment to acknowledge their own privilege before making sweeping statements at how easy it is to be debt free.

I've been in debt and I'm now debt free. Apart from our Mortgage which we are overpaying. To stop me going back into debt I've built up savings for emergencies and for things like holidays/house decor: not urgent repairs.

The money saving expert forums helped my outlook and habits massively. Also long term NHS staff so I do receive some sick pay or redundancy pay if that happened.

It took a while to save but not as long as it did to pay my debts back. But I got there and I'm lucky I've had a stable income and no major costs recently bar buying our house! I don't want to ever be reliant on overdrafts and loans etc it's horrible. But I was on a lower wage and I'm more careful now so hopefully it won't happen again. But you can't say never!

Of course, it is! I've lived debt-free for many years. It does mean waiting for luxuries rather than borrowing money for them. As someone who remembers rampant inflation and high-interest rates (17%+), I guess I still have a horror of debt. With low-interest rates, it's just too easy to borrow money now and this encourages people getting into debt.

Of course it's possible if your income covers the things you need and want.

If not, the choice is to find a way to do/get the thing cheaper, go without or get into debt.

Sometimes it is easy to stay out of debt if your income is above your expenditure, either because you have a decent income, or because you don't need/want much.

But if you need (high housing costs, need decent working car to get to work, high childcare costs) or want (expensive discretionary items and aren't prepared to look for a cheaper alternative or go without) something that exceeds your means then it will be difficult or impossible to stay out of debt.

Of course it is if you have enough disposable money.

However, even though I pay my credit card off as soon as I purchase anything I prefer to use it over cash/debit card for the benefits it gives me (air miles, insurance etc) so having 'credit' available can be beneficial even if you don't need it.

Debt is not a given. I have gone through many very financially low periods of my life and never had any debt aside from a mortgage. The years where I had very low income, we had no overseas holidays, the kids had their essentials and some extras. Having some savings for emergencies was also very important.

I think people find it difficult living within their own means. I know people in debt who still have the full range of Sky services, new iPhones etc and say they're doing everything they can.

Different circumstances exist but I feel most people get into debt because of mismanagement of their funds.

My income will also drop by £150 a week when I get moved to universal credit and I'll really struggle then. I'm currently on the max rate of all disability benefits and that rate has been massively slashed with UC.

You won't be, @aLilNonnyMouse, if your transfer to UC is when they decide. There is something called "transitional protection", that means your money will stay the same until benefit rates catch up with what you get now.

If you're getting the severe disability premium, you won't have to claim UC even if you move or something anyway. They stopped that after a test case was brought about the loss of the premiums, and people getting the premium still claim legacy benefits now.

Re your budgetting, I used to coach claimants in budgetting and have a handy little spreadsheet that could really help you. It works on a 4 weekly cycle, so you can include the income on the day it arrives, and it averages things out over 4 weeks. Pm me your email address if you'd like it, and I'll send it to you next week when I'm back at work.

YABU. If you don’t have a stable income, it’s really tricky.
I’m fortunate, we both have an income and it’s steady. I am paying off my student loan still and probably will for the rest of my working life. However, I have serious health conditions and have had long periods of sickness. When the pay runs out, it’s very hard as the bills don’t change and we only just earn enough to get by when I’m on my usual salary. We have used credit cards and they’re now all paid off but it’s given me an insight into how easy it is to get into debt when income suddenly changes.

Of course it's possible if you live within your means, get a decent job, etc. Other than mortgage, I've only ever been in debt once. That was when I had to buy some study books which I couldn't afford that month, so paid on credit card and only paid off the minimum payment for a couple of months, then paid off the balance out of wages two months later. At all other times, my savings have been more than the amount owed on the credit cards (usually fully paid off monthly).

I saved before buying anything, whether a car, clothes, gadgets, or whatever. I didn't buy a car before I had enough savings, not only for the car, but also for the insurance, road tax, and a contingency for repairs etc, but then again, my first car only cost £600 and lasted a couple of years. By the time it needed scrapping, I'd saved a couple of thousand and could buy a slightly newer car that lasted 4 years. And so on.

I was still using a old "film" camera when everyone around me was buying digital. The world doesn;t stop turning just because you live within your means rather than buying stuff just because everyone else has it. By waiting a few years to save, I bought myself a lovely, modern, top of the range digital camera far superior to what I'd have bought a few years earlier, that's still going strong and still pretty good spec compared to today's standards. My friends/family who just couldn't wait and had to buy the first generation of digital cameras have long since thrown them away!

Same with clothes. I have work clothes which are 20 years old and still in regular use. Obviously, I also have more modern clothes which I rotate with.

So, in 55 years of life, I've been "in debt" for just two months. Not bad for someone who started working on less than a pound an hour, having to pay for my own professional studying (work wouldn't support me), studied in my own time around a full time job, walked to walk at times when I couldn't afford the bus fare, etc.

If you never get beyond your means in the first place, it's a lot easier to stop yourself getting into problems. Always going to be worse if you let yourself fall into debt and have to try to claw your way back out of it.

My philosophy of saving before spending was borne out of my elder brothers' mistakes. He spent like no tomorrow. He'd get a store card and see the credit limit and regard it as a target to spend, with only the intention of paying the minimum amount. I remember he got a "Hepworths" card to buy a jacket - it was about £40 but the credit limit he was given was £200 - literally, next day, he went to Hepworths and spent the other £160 on clothes he didn't really need. He did the same with a "Tandy" card after buying a radio in Tandy - went and bought a ghetto blaster for a couple of hundred. Madness. He ended up paying several hundred pounds per month just in minimum payments on dozens of store and credit cards. I once saw his statements - they were horrendous, barely paying the interest let alone the debt. He never recovered - still in massive debt in his 60s, which nothing but a load of tat and landfill to show for it. Trouble was that he got a good job straight out of school and earned more than me.

Debt is absolutely evil.

I'm lucky enough to be debt free. We drive an OK car, live in a small house but in a very expensive area. Apart from holidays, DH and I don't really buy into the 'must have a black range rover and the newest iPhone' thing, so we manage to live within our means. Others like to have more 'stuff' and are happy to juggle credit cards and loans to have them. Horses for courses I think.

Actually read my last post back and gave my head a wobble. Of course debt isn't all about having nice things (I was thinking about my particular friendship group) Many people face debt through our terrible UC system, zero hours contracts etc. I appreciate that we are more fortunate than some in this regard.

We're debt and mortgage free, but we're older, so no kids draining our resources.

We have credit cards, and use them now and again just to keep our credit rating up, but pay them off in full.

We bought new sofas in a sale recently, and were going to pay in full. However the shop was offering another 10% off if you paid by their credit card, so we applied for it there and then, it was approved straight away and we used it straight away, even though we didn't physically have it. Doing that saved us £234!

I somehow ended up paying interest though. It was extortionate - 7p! They must charge by the hour or something.

Only debts are student finance repayments, car finance (travel a hour each way) and eventually mortgage (but currently rent). We live below our means as we are currently trying to establish careers before we get a mortgage etc.

I'm debt free and always have been , own my own house outright , most of my friends are in a similar position with perhaps a small mortgage

I think living off credit and getting into debt has become the norm. Everyone wants everything now and isn't prepared to wait and have that sense of self-achievement from saving for something. Some can't do that because of very low income.

I used to have £20k of debt from credit and store cards which I'd max out and, oddly, savings which were earning less interest than I was paying on the debt. I was an idiot. However, I used the savings plus a bank loan to pay off all debt, cut up the cards and, after paying off the loan, have been debt-free for years. I love that feeling of not dreading the post arriving.

Everyone is at different stages of their lives though and, for many, there is no choice but to have debt for furniture or cars if they are only on NMW in a society driven by consumerism.

It would be great if we could all live simpler lives and realise that belongings mean sod all in the overall scheme of things.

Yes it's possible. I do it. I don't have credit cards and my car was bought outright.
But it's not easy.

It’s very possible

Small mortgage, cheap cars, phones bought outright (doesn’t need to be latest iPhone)

My current debts are - my phone contract - but once that ends in August I will just be sim only.
A small amount when the house needed work, which once paid off will be the end of it.

Always bought up to live within means and not borrow

I owed 24£K when I went back to work after a career break (which has also affected my pension contributions)
I’m almost clear and was doing fine until last week when I got a 1,250 dental bill

Yes it is possible to live debt free but I think it depends which way your life goes.

Think back to when you turned 18 and were able to get credit. What was it that you first got into debt for? Could it have been prevented?

Store cards and loan for a brand new car? Yes.
Being thrown out at 18 and having to rent and then losing your job? Prob not.

I do think we should be better educating our older teens on the consequences of taking out credit, once you're behind with money it's hard to catch up.

To be fair I should add
I don't have children draining my money , no smoker non drinker , no expensive subscriptions for telly etc , cheap car etc etc

Could it have been prevented?

I think this is absolutely key.

it is very easy to deal with life's curve balls if you're in a decent position in the first place, if you're not it becomes less so.

How do you pay for a fix to your car, buy a new washing machine, buy food even if you don't have the money available to pay for it?!

Even if you commute a long way or need a car for work, it doesn't need to be a nearly new one or a £200/£300 per month lease.

Modern older cars are more reliable than ever. I'm sat here staring at my 12 year old Citroen parked outside which have never broken down. I happily drive everywhere in it - just done a few hundred miles on a long motorway journey. Yes, it's got a few small marks & scratches and sounds a bit rougher than it used to. Other than annual servicing, all it's needed is a new set of tyres, so has cost me less than a thousand per year (inc purchase) and I hope to get a few more years out of it yet.

I have exactly that, a mortgage and no other debt. I save very hard and wait to buy things and refuse to use a credit card. I have a contingency fund in case of emergencies I've sacrificed a lot to build and I'm proud of the hard work I've put in to get there despite redundancies and set backs. The sacrifices of my twenties finally paying off in my late 30s. Its not for everyone but you are correct in saying it can be done.

This is not in anyway saying hard working people can't get into debt, can't afford to save if on peanuts etc. and I recognise its much harder to become a home owner with the deposits the banks are asking for these days (I only had to save 10%). I also recognise my parents let me pay minimal rent for 8 months living with them after university (which yes I worked in a factory all hours and paid myself through) so I could save my deposit which not everyone has the privilege of.

Of course it is , live within your means !!.. I have friends who have tens of thousands of personal debt , I can never fathom why except they spent too much money every month .. would worry the life out of me ..

People on universal credit can also have issues with budgeting due to stupid things like double pay months.

This should absolutely not be happening.

HMRC have issued guidance to employers telling them that when staff are paid early, the payslip and data uploaded to HMRC should show the usual pay date, not the actual pay date. Any employer still doing this is not complying with the guidance, which was issued last summer.

Laughably, as an organisation, we made representations to the DWP to address the 2 payments issue (it was as a result of concerted lobbying that the government changed its stance and the HMRC guidance was issued), but tThe organisation only got round to changing their payroll practice in about November, and that was only after we took it up with the director of finance.

Anyone who still finds it happening should take it up with their HR or Finance department.