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?

I am mortgage and debt free. I am 54 though so I have done the mortgage and putting stuff on cards thing. I used to spend a lot on cards but I gave my head a wobble and paid them off. I was buying crap so not necessities. For the last few years I have not paid a mortgage. I think if you can totally live without debt, other than a mortgage. I paid off my debts by just buying what I needed and once you get into that groove you can switch off from consumerism.

I have slipped a bit in my spending habits, but this time I am spending my money as opposed to spending a credit providers.

Of course it is possible to be debt free!
I have a mortgage and that is it.
I do have credit cards and they get used but they are paid off within a day or so if not within hours of use by bank transfer.

It's very difficult for people on low incomes not to get into debt. Benefit rates are so low, that the smallest mishap can tip someone into needing to borrow.

I once saw a client cry when her teenage son came home from school with the sole hanging off his school shoes. She had no idea how she was going to buy him a new pair until she got her next ESA payment 10 days later.

She was benefit capped, and after paying her rent top-up and her bills, she was left with about £70 per week to feed and clothe herself and 2 children. She was in "affordable" HA housing too, she'd have been even worse off if she'd been in private rent.

Bloody heartbreaking.

We are, and have never had credit or owed a penny except for mortgage.
It's a bit hard to save for a full house, but even this I've seen done, with smaller cheaper properties in cheap areas.
We live frugally as believe in freedom and time, rather than ft work and less freedom.
It's just the way some choose to live.

I think if you're working full time and financially plan for the short, medium and long term then yes if you are working. With the exception of mortgage and possibly student loans. Live within your means, always put a little space aside emergencies/repairs , when we were earning a lord less we both took on second jobs to ensure we had no debt.

It shouldn't be a privilege, it should be possible to live within means.

If debt is due to people buying what they want but don't need then that's not on.

If people are in debt due to not being able to meet bills because of zero hour contracts, late benefit payments then that needs looking at imo.

thecats You're saving more than myself and my husband earn together - and we have a mortgage and 2 kids.

It's super easy to save when you're earning large amounts!!!

Try living on £70 a week for food and clothes after direct debits have been paid and then come back and say it's something people are doing wrong. (Just trying to work out where I've been massively overspending!)

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.

Our saving were depleted when we first got back of track by an accident that injured DH – and wrote of his vehicle. There were a lot of costs – even getting to and from the hospital was expensive - we did get some money eventually – paid down some of the mortgage and took first family holiday but it wasn’t as much as you see on TV and the initial costs were awful at a time of stress.

We’ve been lucky with family as well -remember how hard they found it with young kids -so sometime if near Christmas or birthday failed or nearly failed appliance have been bought for us which has made massive difference to us – clothes for the kids means we need to spend less lots of little supportive things - not all the time but enough to help.

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

This happened to me. The washing machine broke down. I washed everything by hand till I saved up for a new one. It's a luxury, not a necessity.

It's one of those awful harsh realities that you can save more when you have more.

For example, I can search for the best deal and then pay for my car or home insurance in one lump sum, rather than more expensive monthly payments.

If my car exploded tomorrow, I could find the money for a replacement from savings and not need a Wonga loan.

If there was a very big financial hit, I would be able to get better rates on a credit card or loan, as my credit score is perfect - thanks to reliable and proven use of credit over the years.

And things like a weekly shop at an M&S in a petrol garage won't break the bank for me, even though I'm usually voluntarily found amongst the 30% off labels at Lidl (it will annoy me though as I am naturally parsimonious).

Having money gives me the luxury of choice and time to save or earn even more, which many people can't take advantage of.

Of course. I chose to take a small student loan in my final year but that will soon be paid off (has taken a few years of it coming out my wages). Other than a mortgage, I don't do debt. If I can't afford something, I can't have it. Simple as that. Living within my means.

Live within your means, always put a little space aside emergencies/repairs , when we were earning a lord less we both took on second jobs to ensure we had no debt.

How are you supposed to take on second jobs when you have two kids? The childcare would cost more than the income. Who's having the kids whilst you're out again at a different job?!

Breakfast club and after school club alone for two kids is £50 a day - so £250 a week, £1000 a month. I work evenings now so that I don't have to pay out £1000 of £1300 to pay for childcare (that's what I would earn doing my old 8-6 job) Barely see my husband as he's working days.

A think a lot of people not in debt have family around to help. I know of a lot of families where both mum and dad have well paid jobs because Granny takes the kids every morning and every evening after school for free.

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

I don't understand this, how can you be privileged by not having credit, surely you have fewer things, afford fewer bills, less stuff.
I certainly don't feel privileged, we just don't buy unnecessarily.

We moved country, bought a cheap ruin, did it up gradually and have lived without debt. I'm sure this has saved us a lot of money stress over the years. At times we have less money than other times but no one can kick us out of our home. The kids have had free university in this European county and will be starting their adult lives with no debt and the possibility to buy affordable housing.
Good for us but less good for the banks. The UK is all about the financial market so it's in the interest of those who rule to keep everyone in debt.

Of course, it is! I've lived debt-free for many years. It does mean waiting for luxuries rather than borrowing money for them.

It's not always about luxuries. A colleague of mine had to take out a car loan when her car became uneconomical to repair. She was an essential car user, so had to have a car to do her job (no company cars in the 3rd sector lol).

Then her landlord wanted to sell her flat and issued her with a notice to quit. Her rent hadn't gone up for a good while, but rents generally had risen a lot, so her new place was a lot more expensive, plus she had to take out a loan for fees, deposit and rent in advance.

Although she got her deposit on the old place back, she couldn't use it to pay down either of the loans, they were fixed term things and there were penalties for early repayment. The loan repayments were crippling her and she ended up using food banks some months.

When her manager heard about her difficulties, she raised it with a senior manager and the organisation has amended its season ticket loan scheme so that essential car users can borrow up to £2k, interest free, to buy a car.

These are the realities for people on low incomes in areas with high housing costs, I'm afraid. And austerity, as our projects are funded by local government, so we've only had 3 tiny pay rises in 12 years.

I don't understand this, how can you be privileged by not having credit, surely you have fewer things, afford fewer bills, less stuff.
I certainly don't feel privileged, we just don't buy unnecessarily

The privilege is being able to afford things - or have disposable income to save for things - when you need them.

Other than a mortgage, I don't do debt. If I can't afford something, I can't have it. Simple as that. Living within my means.

Well, it's not actually. Using credit wisely means you have access to better options. I put everything I can on an American Express card for the points I get, and a Visa for everything else. Overseas I use a Halifax Clarity Card.

All within my means and all of them get paid off in full each month.

Using them strengthens my credit file as a good bet. So if I want to take advantage of 0% finance on a new sofa, rather than use the savings I have for it, I'll get approved and my money stays in my account for longer (admittedly this is less of a factor since the days of nice high savings interest rates).

Or when I book expensive flights, I have the credit limit to cover it, and get all the consumer protection. (And I get the Amex points on that too...)

It's about managing money intelligently, not just assuming that all credit (debt) is bad and to be avoided.

@Besidesthepoint

Really?!! So, you’re working full time doing shift work, have 3 kids and have enough spare time to do a full family wash, including bed sheets by hand.

Maybe as you have so much spare time available, you might like to volunteer a bit of it in a local food bank or the Citizens Advice and then come back here and talk about how you’ve helped your clients to easily live within their means, just by being frugal. 🤦🏻‍♀️

Depends on your situation. I have a comfortable income and savings so would never take debt apart from mortgage (rate on mortgage is less than I get on my savings so no point paying it off). If you're on a very low income, can't afford to save and have an unexpected bill then I'd see little option but to borrow.

I do feel privileged in that I have a very well paid job but I also live within my means (and choose not to have children or buy expensive handbags or cars) This means I have a mortgage which will be paid off in 5 years and no other debt. I have a credit card purely for frequent flyer point collection purposes which is paid off at the end of each month but I don’t actually need it.
Some of it is making choices about lifestyle but tbh you need a decent minimum income to do that otherwise any small unexpected outgoing could put you over the edge and into debt. I can only do it because I have enough to start with

We do not have car finance,no mortgage, no loans, no credit cards or store cards etc no catalogues or klarna etc no finance. Phones are PAYG.
So it is possible.

Yes, if you live in your means and ofc your circumstances which can change at anytime.

Husband and I earn around 22k each, so def not high earners!!! Other than mortgage and my student loan which isn't too much tbh, we don't have any other debts - I understand circumstances can change at anytime, redundancy health etc.We have a modest house which was purchased with a mortgage using just my income. This means that we have been able to treat ourselves to holidays etc and to overpay. This year we were able to o/p by the maximum 10% - however that won't be possible to be a yearly thing! Mortgage is still a debt which I want to get rid of and its surprising the number of people who don't see it that way and are happy to pay it over the next 35 years or whatever.

My fervour to live within my means, to be debt free and one day mortgage free is from having a father who was a compulsive gambler and irresponsible with money.

@StarUtopia

You're missing the bit where I said that's where I started.

My parents were and are incredibly frugal. They didn't need to be, and I have some bitter memories regarding that (e.g. my mum telling me off when I tore a pair of second hand trousers, ignoring the fact I was crying and bleeding badly, and they could have well afforded new).

They could be controlling with money, and as we lived rurally, we were more dependent. That meant I was very determined to be completely independent of them.

Yes, my first job paid very little, and I lived on that money alone.

I stand by the fact that those habits of frugality have put me in a very good position in the long term.

I lived off £13 pounds a week for food during my first job. I didn't buy clothes every month - probably about £20 every two months?

then come back and say it's something people are doing wrong

As for that comment, I'd love for you to re read my post and find the point where I said anything about anyone else's spending habits?

I was just describing how my upbringing and changes in income related to my spending habits. As you are free to also.

Well I graduated with 12.5k debt which was difficult to avoid really.
Sometimes, a bit of debt is sensible. We made a major purchase recently on 0% credit. We have the money available to pay for it, but the money is better off in an investment we have where it is earning us money. Credit (and therefore debt) can be used sensibly and to our advantage.
My mum lives alone in a small mortgaged house (she is mortgaged until she’s 70, she’s currently 60). She works full time earning minimum wage. When her car died recently, she had to take out a small loan to buy a new one. Sometimes debt is unavoidable.

@Drabarni

It absolutely is a privilege to have a steady income and I say this as someone who has a ready income and isn’t in debt apart from a student loan. Not all people on debt are in debt because they buy unnecessarily. Many people are in debt because they have no other choice if they want to heat their homes. Lots of people find themselves in very unexpected situations that they couldn’t have planned for.

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.

You've been very lucky then @gingersausage. You've obviously never had a disaster that has required a big spend to resolve when you've been on the poverty line.

What would you advise someone with a young family to do if their washing machine breaks beyond repair, and the nearest launderette is 10 miles (and an expensive bus and train ride) away?

I think buying a new one on credit is a perfectly rational and reasonable response, in those circumstances. As is taking out a loan for a car when you live in a rural area and the nearest town is an £8 bus ride away (and those buses start at 8.30 and stop at 5.30, so useless for commuting to work). Better that than jack in the job and go on to benefits, surely?