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?

Yes it is possible to be debt free.
Our mortgage is now paid off. We pay our credit card bill in full every month(it comes off automatically by direct debit from our current account ).
Our cars have been bought outright or on interest free credit.
I refuse to pay more for anything by paying interest( mortgage being obvious exception).
I know we are fortunate to be in this position.

No one would give me a loan on the pittance I'm on! Sometimes I really want to get a credit card and bugger off to the Bahamas, pay for driving lessons and a car, but I never would. People who have been helped by family members re driving lessons/car/mortgage etc don't know how lucky they are. I think this is where a lot of peoples debt comes from.

I'll be debt free until I take out student loans next year. Qualifying in a decent profession is the only way I'll ever be able to afford anywhere near a decent life. Even then with one wage I know I'll struggle until my boys move out - and kids move out so much later now! My brother is 29 and still lives at home!

Yes - though I live very frugally, have a good salary + savings and had my degree paid for. But different people have different circumstances.

In my early 20s education put me in debt – and that was pre loans and with some grant. Then further in debt to pay for rent and working costs.

All paid back early.

DH didn’t have the student debt as his parents were in better position to help him avoid those and the debts involve in setting up with first job - mainly as he’s an only child. Neither of us come from wealthy backgrounds more childhoods were our parents worried about money and having work.

Our early 30s our saving went on house deposit and despite full structural survey house was money pit – made worse with young kids one wage and that having been cut for career opportunity reasons – which has since paid off.

It was made worse be series of bad luck events – that sapped our savings but when we had to do some urgent work on house we were lucky my families financials always poor had improved and they could offer us a loan – we paid interest but it was lucky as when DH was made redundant they were find with us stopping payments for a few months.

Now in our early 40s – have house that isn’t a money pit and only debt we have is the mortgage – loan to value ratio is high and we’ve over paid by years and we have savings.

So yes it's possible - as we're doing it but it's come with time, hardwork and some luck and I think it's even harder for many in the younger generation behind us.

Yes it is completely possible but it takes discipline. I never used to have any debt but now have loads. It's all been caused by buying stuff "now" rather than saving up for it and having it later (and possibly deciding I don't want it at all).

I think it's possible but it's bloody difficult these days!

I am actually debt free as my mortgage has ended and I pay my credit card off every month - but I've been very fortunate in terms of timing of house purchase and savings having an actual decent return - they don't now!

For young people these days it must be incredibly hard to do without a hefty income - but of course a lot of what people expect to be able to have these days is easily available on credit and so saving up is less of a thing than it used to be.

I grew up with a financially reckless father
DH grew up with a financially reckless mother.
Both of us are paranoid about debt because of our backgrounds.
We are lucky that we earn well but No, we don't do debt.
I wish I could be more spontaneous and just buy on credit eg when we wanted a new caravan it took us years to save up for it, years we could have been enjoying it if we had taken credit.

Apart from a £1000 debt after leaving uni 30+ years ago I've never had debt. Never paid any interest on a credit card as it is paid off in full every month.
Having said that I've always been lucky enough to have enough money to cover basics. The rest is down to budgeting.

I have never had any debt apart from our mortgage ( now paid off). I'm now in my 60's but as a teenager my father encouraged me to get a part time job and save for a car, which I did, and then saved for its replacement and so on for now over 40 years. TBH I'm actually very scared of having debt, the sense of freedom is very important to me. One reason I enjoy my job is that if i didn't i could tell them to stuff it, though as a decent person I'd give 3 months notice.

I think it depends what you want in life, how impatient you are about having stuff quickly, personal circumstance and a hefty amount of luck.
We have no debt except our mortgage payments. We have a small amount of savings that could deal with a run of bad luck but not anything huge. We are aware that we are lucky my husband has a decent job and I can stay at home with our toddler and we are aware that it could go away easily which is why we save.
My husband is a very cautious man with money, and has always been, I’m a bit more liberal but I respect that not having savings stresses him out so I don’t go crazy with purchases even though I have equal access to our money.
My mum has credit cards and loan etc, and while she isn’t in crippling debt, she considers it a necessity to live the lifestyle she enjoys. She would rather go on holiday and enjoy herself and pay it off later and she is very generous to everyone on birthdays and Christmas etc. She often asks why we don’t go on holiday much or just buy the new thing we are saving for. We do go on holiday, but not if we can’t afford it. We do have new things but we save for them instead of using credit. Our savings are for if a vital thing went wrong in our house and needed immediate purchase.
It’s all about the attitude to money, and our attitude is don’t spend money you haven’t earned yet.

Your friend is correct OP.
Debt in the 21st century is inevitable for a large percentage of people but the gulf between rich and poor is growing and we’ll be back to Victorian times soon enough, if the Tory voters get their way.

Sadly, there are some sanctimonious twats on this thread who have no idea how others have to juggle their finances just to manage.

I say this as an older person living virtually debt free most of my life but acknowledging that I’ve been lucky. I studied part-time many years ago so with much lower tuition fees than currently and as I was working, I didn’t need to take out a loan to cover my living costs. My housing costs were lower as I took out a 100% mortgage on a small property costing less than 40k and didn’t have children until later in life.
That simply isn’t possible nowadays.

However, for anyone on a low wage or zero hours contracts job for instance, how are you meant to cope when your washing machine breaks down unexpectedly or some idiot rams your ancient lovingly cared for car at the lights and you can’t afford to get it fixed or buy a replacement unless you take out credit. Even if the other party does pay up eventually, you still have to provide the money up front.

Anybody about to say ‘well they should get a better paid job then’, just stop and think about that for a minute.

If no-one works these lower paid jobs, who is going to serve you in the shops, cafes, clean the hospitals, deliver your online parcels etc... ?

I don't have any debt and pay all our bills on a monthly basis but I had a far bit saved in my account from when I worked and lived at home for car emergencies or like now with my crappy maternity pay plus I also have a deposit saved to hopefully buy a house this year. My partner however struggles on a monthly basis and has very little left each month and he has got lots of debt which he is trying to pay off. The difference between us is he went to university and I didn't.

Debt is not necessarily a bad thing. Unmanagable debt is.

Exactly.
I chose to re-carpet my whole house a few years ago, which cost about £3k. I didn't have that in savings and it would have taken me ages to save so I got finance through the carpet shop. It was 0% interest and allowed me to spread the cost of the carpets across the next 3 years with manageable monthly payments. Total no-brainer as far as I am concerned! But then, I am very careful with money and factored repayments into my monthly budget. That was the only debt I had, apart from mortgage and a small amount (less than £500) on my credit card.

It's still "living within your means" if you can afford the repayments, IMHO

debt is so cheap these days to pay back, its almost worth buying a sofa , a car or a holiday on credit and paying it back- its much harder to save thousands of pounds at a time for these items.

Don’t be ridiculous @JacquesHammer, there’s nothing “privileged” about spending less than you make. It’s incredibly insulting to imply that poor people automatically have to get into debt because there’s no other way to manage. We’ve been poverty line poor at several points, but we’ve never been in debt.

Yes it is possible

@MarieG10, I agree with you about taper rates, they're far too steep.

Someone who's above the tax and NI thresholds loses 32p out of every extra pound earned. If they're on UC as well, they lose 63% of what's left, so get to keep about 24-25p (too lazy to stir my fat arse from the sofa and get a calculator). I think the taper rate should itself be tapered!

I am already sick and tired at work of the universal credit taper that allows people to work but as soon as they get a pay rise they want to cut their hours to prevent UC reductions.

Under tax credits, the taper was 41%, but that was on gross pay, rather than net, so probably ended up about the same. People never kicked off about it on tax credits though, as they didn't know about it until after the end of the tax year, by which time it was too late.

They kicked off like mad when they got the tax credit overpayment notices though...

I too am debt-free apart from mortgage, which is my sole focus to clear. I have savings but use cc for points and big purchases and pay off in full, so I also earn off my spending.

As a natural pessimist, I work hard to live a relatively frugal life in case the sky falls in tomorrow. Even so, I recognise I am very lucky to be where I am now.

We are at the moment apart from mortgage but that hasn't always been the case and I don't think always will be. Have been lucky recently with jobs and inheritance from an elderly relative but have had times when it has been a necessity

My partner and I have zero debts. We did but small amounts and paid them off ASAP before our little boy. We do live on a boat though so i suppose we have chosen to live completely debt free as we own our home outright and this wouldn't be for everybody.

If we want something we save for it. We both earn a good salary, we're by no means rolling in it but i think in some situations its about prioritising what you need and want. Which is not always easy!!!

I used to think like you. Then things happened.

The latest one...husband lost his job ..so we went without any pay for 3 weeks. Finally gets new job - brilliant! But it was monthly pay instead of weekly pay, so we went ANOTHER 4 weeks without income.

We are now £1500 overdrawn with £2k sitting on a credit card.

We only have about £200 a month spare at any given time. Christmas has happened. Car needed a service.

You tell me how long it's going to take just to clear losing a job and starting a new one?!

Wow! I’m shocked by the attitudes on this thread!

I live in a cheap area, we both drive 10 year old cars which were bought with cash. We rarely go on holiday and certainly don’t go shopping as a leisure activity as many people seem to. BUT we cannot live debt free!

I’m a teacher married to a civil servant. Govt policy means we’ve had no meaningful pay rise since 2010 and still the cost of living keeps rising. When something goes wrong with the car, or white goods need replacing we have no choice but to use a credit card and the balance just sits there.

We have children in state schools and every year the uniform and ‘voluntary’ contributions take a big chunk. The food shopping gets more and more expensive - I don’t have the luxury of time to trek around various supermarkets in search of good prices so we depend on Tesco deliveries (free) and only buy brands if they’re on offer.

This is not an elaborate lifestyle, it’s just normal family life. It’s bloody expensive and public sector wages can’t keep up. So YABU, all of you. For many families debt is a fact of life!

Whilst I didn't enjoy certain aspects of my youth as a result, I am pretty grateful for the lesson in frugality my parents taught me.

I'm very good at both delaying gratification and down-ramping my expenditure, as well as prioritising savings.

So when I was on a very low income living alone I didn't incur debt, and I probably could have spent more in my 20s, and certainly was spending less than friends on similar incomes.

As a result I put down a 20% deposit on my house without help from parents, and kept some savings back too. Then both my DH's income and mine increased significantly. We both considerably upped our mortgage and pensions payments.

Now I'm earning a lot, I have slipped into a pattern of regular spending. However, I'm putting about 1.5k a month into some form of saving (pension, cash, mortgage overpayment, holidays fund), and covering all my bills, and still have a discretionary £500ish fun money.

I do and have always done. It's a mindset. I was a secretary so not a huge income or anything. Took a mortgage as well. My house was full with secondhand stuff till well in my 30's (I'm 40 now). I wore secondhand clothes and wore my shoes till a hole fell in them. I was tge last person in my friend group to have a amartphone or a laptop. I cut my hair twice a year, didn't go on holiday for 6 years once. I never understood how other people could spend so much money and have everything new when I dudn't. Now I know, they took loans to keep up with the Joneses. People throw away clothing as soon as you can see that it's not brand new. That's ridiculous, most clothes are still perfectly wearable. Same goes gor furniture and cars. It doesn't have to be new, it doesn't have to look new either. You don't need a holiday when you're stressed, you need to have savings so you can relax on your own balcony with a good book. You don't need a personal trainer to get fit, you need tp go walking, running or swimming (quite cheap exercise).

We spent a good number of years debt free apart from the mortgage. We save money regularly (by putting money into savings directly from paycheques, or monthly standing orders) and spend on things like holidays, Christmas, cars etc from those.

Recently, due to the way DH is paid, he decided to get a brand new car on PCP, but got exactly what he wanted and specc'ed it up a lot. He could have bought it for cash, but thinks using the car allowance from work to pay the PCP monthly works best at the moment.

We both have and use credit cards, as we travel a lot and tend to use cards rather than cash (and our current accounts charge transaction fees so I prefer to use the credit card than my debit card), but these are paid off in full monthly and we have no interest charges to pay on these. So its a cash flow/budgeting tool rather than credit per se.

We have good salaries, but even when we were on much much lower incomes, DD was in creche, big mortgage, commuting costs, etc - we still managed to have savings and no debts. It's about living within your means. I had paid off my college loans within a couple of years, and we did a lot of work on our first house and our wedding ourselves, grew a lot of veggies, repaired clothes rather than replaced as much as possible, didn't get the massive tv and sky package initially but made do with a "normal" tv and free to air channels, only carpeted the 1st house after 6 months (after we'd paid off the wedding and got carpets in summer sales) - the concrete floors were chilly but fine, I sewed a lot of the curtains in the house as that saved us a LOT of money (and I still use the machine a fair bit), shared 1 car until after DD was born (and only bought that 2nd from savings), still use sales and coupons and offers for lots of things, and think carefully about whether we really need things (although we are able to be a lot more frivolous nowadays than in the past).

We still always enjoyed life, just worked hard to be able to enjoy it.