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?

Some people have the attitude that debt = bad, in fact one young woman I used to work with used to take all of her wages out of the bank on pay day and keep it at home in cash because she didn’t trust banks and was worried about fraud.

When her car broke down beyond economical repair I suggested she look at loans to buy another one, and you would’ve thought I suggested she cut her arm off, she instead got her boyfriend to drop her off and pick her up from work, 20 miles out of his way, every day, while she saved up £500 for another old banger out of autotrader, when it probably would’ve made more sense to borrow £5k to buy a decent car from a reputable dealership that would last years and be safe and reliable.

What about student loans? Many people will be "in debt" from these for years.

I was in a huge amount of debt when my previous relationship broke down. I worked hard to pay it off and now aside from my mortgage and a 0% card I have no debt. I have the savings to pay the card off but it might as well earn interest on that. But! I get how hard it can be to not be in debt.

Apart from a mortgage myself and my husband have no debt, no credit cards etc, and never plan on having any.
We live by the rule if we can't afford to buy it we don't get it.
That said he earns a good wage and we have had no reasons to ever borrow money. We aren't huge spenders or extravagant.

It is a privileged position to be able to be debt free

This

Of course it’s possible to live debt free if you come from a comfortable background, with supportive family and helpful friends and have no catastrophic or unfortunate incidents happen to you then you.

There aren’t many people like though outside the upper and middle classes.

then yes, not then you ffs

Depends.. I left uni with £55k of debt... not sure how I'm supposed to get rid of that tbh

YANBU to think it’s possible but it depends on individual circumstances. Theoretically we do but I put everything on credit card to get points/air miles/ JL vouchers etc. I pay it off daily.
We are thinking of buying a new car but equally considering leasing it since it’s such a cheap form of lending.

I was debt free the whole time I was single and working full time. Once I got married, had children and went part time the debt started. I can’t work more hours as childcare is too expensive. We don’t have options if something goes wrong as no savings so that automatically goes into debt. But it won’t last forever, kids won’t stay small forever and I’ll be able to work more hours one day! I used to stress about it a lot but what’s the point, I can’t change anything right now, we’ve already cut down on everything we can. As long as the kids have everything they need then we will get by.

@contentedsoul

But all the money in the world will never give me back my wasted younger years, the nights we stayed in to save money, the years that passed without holidays.

This gave me food for thought, as does your entire post. I fought hard last year to start debt repayments (I'm on my own and on DLA equivalent) and I have plans to continue paying back this year. But I'm going to be less strict with myself after reading your post. Thank you for sharing so honestly.

There aren’t many people like though outside the upper and middle classes.

No, the Polish people I referred to, came over here with nothing, I believe.

I lived without any debt (apart from mortgage) for years. I have a small credit card debt and 3 piece suite on credit, but tbh could pay it all off out of savings now. My car is on credit as I'm in receipt of a company car allowance which has restrictions in terms of size/age etc. and I didn't have £20k to fulfill them in one hit. My payments are all within allowance though and I have a car with amazing fuel efficiency.

If you are fortunate to be able to work in a job that pays enough to build an emergency fund then yes, it is possible. If you are on a low income it is very hard. Even if you think you are living within your means and saving for annual bills like car insurance, it just takes one unexpected bill for everything to go tits up.

There aren’t many people like though outside the upper and middle classes..
We had no family help. No magic money tree. No inheritance. We worked hard and studied hard to improve our lot.
When the children were tiny my husband had three jobs, including one as a headteacher. We could then make ends meet and save for the unexpected and our future.

I have always had the attitude that you should save to get what you want rather than get into debt to get what you want. Lived with second hand non matching furniture for years, never invited anyone round, never had nice holidays, nice clothes. I think young people nowadays expect much more straight away.

But now I am mortgage free and have some savings, and I’m still a saver not a spender, and find it hard to justify spending on any luxury items!

If you are fortunate to be able to work in a job that pays enough to build an emergency fund then yes, it is possible. If you are on a low income it is very hard.

Not critising people who borrow money as it's up to them. However the argument that they can't afford to build up an emergency fund but can afford to pay back loans doesn't make sense. The cost of building an emergency fund is less than the cost of paying a loan.

I pretty much live debt free apart from a mortgage. I work full time I have two children and I'm single parent. I know other people who complain a lot about having huge credit card dates are but they take three holidays a year which they put on credit card.

I try and live within our means which means saving up for things that we want to do and spending that money on holidays rather than charging a holiday and then paying it off. But I do think paying things and carrying debt and then paying debt of is considered very normal way to live for most. I try to avoid it.

Something very smug about people who are debt free..not everyone but a definite air of worthiness on some of these posts.

We got into debt because of the recession, job loss and illness. Its horrific.

But yes also you only get one life so nothing wrong with an affordable loan to buy some fun/make life easier.

Theres no medals at the end for having lived debt free..you are only impressing yourself!

Just mortgage debt here.

I do have friends earning good money who have high levels of debt for cars, wedding, new kitchen etc. Crazy really.

Getting into debt due to difficult circumstances like illness is awful, but it’s always been said you should have x months wages in the bank as a reserve for emergencies. I know this is hard, but there’s so much “stuff” we don’t need that people choose to have it and get into debt to have it, rather than saving for, which is wrong.

I do agree that of course unmanageable debt is undesirable.

However we need to recognise that sometimes periods of debt in particular circumstances are entirely understandable.

Events in early adulthood can have a significant impact in ones a ability to manage money later on.

I am currently debt-free ( aside from mortgage) having benefited from an inheritance that has enabled me to pay debts off quickly.

Critically though the period of accepting debt allowed one of us to retrain so that we could have two incomes again that work around school holidays ( teacher). Without accepting that for one year our outgoings would exceed our incomings would have stayed probably insufficient for years.

We have no family support, a child with additional needs, have experienced redundancies and mental health crises between us. I experienced bereavement ( loss of a parent) at 19 and was left to my own devices by both father and step parent. As a result I had no help at university and no home to go to inbetween terms. Of course i worked and temper but I starter my career with debts behind me and that meant my salary went on servicing that rather than being able to save.

In the past I have had debt management plans that lasted years.

I am now debt free due to said inheritance.

However that period of debt whilst my husband retrained, we would have done without that inheritance, and we made the decision to have a year of debt in order to better our long term prospects. Without it one of us would have stayed in a low income role for longer and that would have reduced our ability to earn and accrue pension contributions for retirement. The main difference is that we have been able to clear those debts immediately, instead of over years. Overall our economic wealth will be better over our lifetime due to accepting that debt.

We have also not needed to downsize our home and therefore benefit from increased equity due to higher % value rises.

Debt can be a tool. It can enable you to increase your overall prospects.

Having said that, I am happy to be debt free and now in a position to save.

I very much live within my means and downsized after divorce to pay off the divorce debts.
However if the boiler goes or I need a new car I'll need a loan. I can't aford 7k.

but it’s always been said you should have x months wages in the bank as a reserve for emergencies

I agree. I’ve taught my children that and they know we do it so hopefully will follow the same example.

The best time to save is pre children when you are commitment free and can work all hours, two jobs etc. That’s what we did to get our house deposit and ensure we had savings behind us.

We also didn’t waste thousands on a wedding party, I’ve seen so many friends have their big day then moan about not being able to afford x, y and z.

I can see all the mistakes the adults made as I was growing up now that I’m an adult and it made me determined not to copy that and ensure any children I had would have a better quality of life. Many though do copy their role models though so if debt was the norm they will likely see nothing wrong with that.

There aren’t many people like though outside the upper and middle classes..

Rubbish. My father worked in a shop and my mother was a secretary. So well and truly working class on pretty low wages. They lived within their means and that rubbed off on me. I left school (a state crap comp) with no qualifications due to years of bullying. I got a crap job, less than £1 per hour, and self-studied to get O levels, then A levels and finally a professional qualification - all of which I had to fund myself and do the work alongside a full time job. There was only 1 month over those years when I was "in debt" and that was when I had to buy some study books on my credit card and paid it off over a couple of months.

Since then, I've bought a house, got married, started a business, had a child, etc. At each stage, other than mortgage, I scrimped and saved to afford it all. Even during the 2 years where I started a business and then became pregnant, I managed to live within my means despite no regular income.

Middle and upper class people get into debt too you know. It's usually about poor choices. Of course it's luck for some (good or bad), but I'd say for most, problematic debt is down to poor financial decisions.

One of my clients got into serious debt and eventual bankruptcy following a windfall. He got around £100k from an early retirement/voluntary redundancy situation and basically frittered it all away in a matter of months. Not only that, he ended up over £100k in debt too!

He went wild, bought a fancy caravan costing tens of thousands, then realised his car wasn't strong enough to pull it, so bought a new car for tens of thousands, then he needed a fancy awning - another few thousand. Then he had to widen and lengthen his drive because his car and caravan made it virtually impossible to walk to his front door. At the same time, he thought it was a good idea to build a new double garage. And so it went on. Not to mention, clothes, foreign holidays, redecoration, jewelry for his wife, etc etc. He soon went through the windfall and then the credit card debt mounted up. He just couldn't help himself and eventually all his pension was going on loan/card repayments. Then, inevitably was the divorce!

Ironically, they'd been happy earning a reasonable wage and having modest holidays, living in a modest house. But his "lucky" windfall basically ruined him because he just couldn't control his money and made some pretty stupid financial mistakes.