To think a lot of people must have a high amount of debt

[user495827]

I wouldn't dream of being nosey enough to ask people in real life. So thought I would ask on here. I'm asking more from people with average incomes rather than very high. When I say average I suppose I mean around £20000 to £35000
I'm from the North West which I think is relevant as the average house price /wage is lower than the South.
A lot of my friends and their partners are in this bracket. They seem to spend a lot of money. One friend, for example, got married last year a beautiful wedding easily £10000. A honeymoon to Dubai and also a mini moon to Paris. Beginning of this year they bought a house and are completely renovating it top to bottom. I happen to know her salary just through conversations is £25000. Her husbands job probably pays around £30000. Another friend again completely renovating a new house. Both have Audi's cars on finance.
AIBU to think a lot of people spend like this now and that it is normal to have very high debts/high mortgage?
I know it's not my business I certainly don't begrudge them and how they spend their money. I use to earn similar but im now part time and I suppose I'm abit of a saver.

I always wonder this - you need to disaggregate mortgage debt though as it costs a lot less than most other kinds of debt.

Right now we have zero debt, as we paid off our small shared ownership mortgage, and finished paying our student loans this year. We’ve never had any other kind of debt - I was raised to avoid it as my parents both grew up poor and I get the impression my mother’s father in particular might have caused the family some serious money problems which eventually led to divorce. The exception is debt with really clear low/no cost - for example when I went to uni in 2008 we took out the full loans that cost just a tiny amount/inflation, put the total sum in a 3 year fixed rate 7% Icelandic bank account and laughed all the way to the bank. But those kind of debt situations where it actually saves you money to have debt with no risk are unusual. Of course you could take out cheap koansb

I think I am the opposite, I earn a decent wage (not super high or anything but higher than the example you give) but I drive an older cheap car and my house needs a lot of work, even though it is 'homely'. I think I've lived frugally for so long, shopping for charity clothes and so forth, that I really am just frugal full stop. That said, I do buy nice food and so on. I'm not very good at doing conspicuous wealth!

What is a mini moon?

@Greydove28 are you one of those who goes on all the threads writing a comment hoping to annoy? I worked out that's quite common recently

We have a lot of debt I think. It makes me anxious! We live in an affluent area so house prices are high. We earn £90k combined which I think is a high salary!

We live in a comfortable three bed semi with a mortgage of £270k, plus 80k help to buy loan (house is worth around 400k). We also have 3.5k owed from a loan we took out to buy our second hand Focus, and a further loan for 9k which was for debt consolidation earlier this year. We have another 2005 plate car with 230k miles on it! Both of us have student loans too.

We don't buy anything designer, and I prefer charity shops and second hand everything to new, we don't buy expensive gadgets or go on lots of foreign holidays (we last went abroad 2 years ago and havent had a holiday that wasnt a Sun holiday since then). I think of myself as thrifty, low key and a bargain hunter.

So basically I look at people doing big house renovations and driving expensive cars and think similarly to you - how do they afford it? I'm not jealous as I am ust not materialistic - I'm sentimental and love and appreciate everything I have, I just wonder what they are doing in their lifestyle that is different to mine? I mainly conclude that I must spend a lot more money than most on food and wine! Although I dont eat out often and only drink at weekends!

I track all my finances and once we have paid our bills that equate to around 2k, plus childcare costs, plus running 2 cars that need filling up weekly (pre covid), plus loan payments and then my food and wine(!), there is perhaps a couple of hundred left. Not enough to save thousands a year with, or finance a car, buy £700 shoes and bags, or go to the Maldives!

By the way, I do feel that I am lucky and in a comfortable position to be employed during COVID. Hope that comes across!

Thanks everyone else

I have a mortgage, that's it. I saved a lot when I was single. I know this is unusual though because when we got our mortgage, the bank seemed amazed that neither me or my husband had loans

We bought a house last year, Complete wreck. Already spent £20k and it's barely touched the surface (think new windows/doors/fitting central heating etc etc)

Anyway. Friend of mine who does nails has just bought a house in a similar state. Posted to say they were going to do it up on a budget. Three months later the whole place is done and to a high spec. New kitchen, new bathroom, everywhere plastered etc etc. HOW???!

She's actually on tax credits.

I don't get it at all. Yuu're looking at £450 a room just to do the plastering.

I have to presume she is in debt up to her eyeballs.

We moved into a new build development last year & it’s amazing how quickly some of our neighbours racked up debt to get the house looking “Instagram perfect”. All while earning half what we earn, running two expensive cars & going on holiday.

We are savers & like to take our time to consider purchases and get a deal. It’s taken us over a year to save to get our garden done & but more furniture. We’ve put in on the credit card for cash back but will pay it off straight away.

This is making me nervous about my £450k mortgage and my attitude. I plan on increasing our mortgage to around £700k in a few years

@thepeopleversuswork it's a smaller version of a honeymoon

Joint income here of 40k , silly me always thought that was well enough to be comfortable a few years back but it's not at all however we have a small mortgage , 130k ish, car on PCP (mistake) and 7k credit card debt which we are hammering to get down before we remortgage . We're not extravagant but we don't go without either . Life is too short .

Depends what you count as debt? Mortgage and Student Loans? Or additional borrowing e.g. loans/credit cards.

We have a mortgage, and I have an old student loan. Both are serviceable even if I become a lone parent.

Dh and I have 7 months left of a loan we took out to make home improvements, which is also a manageable amount.

Thats it.

We earn around £95k jointly. Both mid to late 30s

No debts other than the mortgage (£50k on a house worth around £270k pre-covid)

We own both cars, but they were bought second hand and now 5 years old.

We have about £30k savings between us - emergency fund

DH has always been ok with money, but I spent most of my 20s racking up and then paying off debt - around £25k plus £12k student loan and car finance at one point. I've busted my arse off working my way up at work to pay it off, and we only had one DC as living more comfortably was important to us. We don't holiday much and we aren't big spenders on eating out or fashion etc

We did have help buying our first house with a £25k inheritance which certainly helped a lot

I remember the stress of being in debt and I never want to go there again. Hugs for anyone going through it

I think a lot of people are in debt.

I also think a lot of people come into money younger than you might think. I know someone who lost both parents while she was in her early 30s and inherited everything, so she and her DH who have average salaries have a completely paid off mortgage and have paid for extensive renovations for it as well. They also take expensive multiple week long holidays overseas most summers.

What is a mini moon?

Thing people have so they can justify having two honeymoons.

Oh, and combined, our income is about £85k, and our only debt is our mortgage. If we can't pay it in cash or the card off at the end of the month, we don't buy it. We don't buy 'new' cars, designer wear or expensive clothes, anything with an Apple logo on it where you're paying for the name, pay for telly (other than BBC), or go on expensive exotic holidays.

My house is worth 300. My mortgage is 192. I have 2 other rental houses and a flat with mortgages on them. Dont know the figures off the top of my head but have over 25% equity in each (you have to to get a buy to let mortgage).
Paying off:
Car- last payment April
New windows- last payment April
Bouler loan for one of the Rental houses 129 per month. Nearly 3 years left.
Loan of 267 a month for the next 20 months for renovations on one of the rental houses. It was a 5 year loan.
1100 on a credit card.
Income 51000 plus rental income.
No I dont want debt but without it I wouldn't have any of my assets...
I dont spend much day to day, things don't interest me but I love a good holiday every year with my children

I have no debt, did have 2 mortgages once.
My dh has no debt either, he used to share the mortgages with me.

The Money Advice Service (MAS) estimates that 8.3 million people in the UK are over-indebted, so that's not as many as you might think.

I don't think I know anyone in my circle who doesn't pay their credit card in full every month.

Often people will have additional income others know nothing about.

I've always been very debt averse, aside from mortgage. I spent my twenties wondering why I couldn't go on nice holidays, buy driving lessons, cars and nice clothes. My friends called me cheap and I truely wondered if I was managing my money badly. In my thirties I discovered that all these friends either had a high debt or no savings to buy a house. They were envious that I could buy a city flat while they need to pay off 20 k debt or so. So yes, I think that for a lot of people debt is normal.l, but it seldom is a good idea (bar student loans and mortgage).

Just do your ownthing and think long term. You aren't going to remember owning those famcy shoes, but living in a house with a lot of equity or buying one and only needing to mortgage 50% of it is a lovely feeling.

@janetsgarden

This is making me nervous about my £450k mortgage and my attitude. I plan on increasing our mortgage to around £700k in a few years

700k on a mortgage?! Why on earth would you want to be that much in debt?!

My mum died and left me £160k so I bought a house. Unfortunately the house I wanted (same village as I'd lived in for over 25 years, perfect size and this is an expensive area) was £175k. So I took 15k on my credit card which I am gradually paying back.

That's my only debt though. I earn about £10k pa.

I think this differences we see, not just on the board today m but in life in general, show just how much those small decisions you make every day impact your spending. Some people buy coffees every day, or buy lunch at work, or buy some item of clothing every week, or smoke. When you multiply that to get an annualised cost you start to see just what percentage of your salary gets eaten up by these small daily spends.

I think people should be distinguishing between debt.
As pp said some such as mortgage or even car are secured by house or the said car so if something goes wrong it is covered. Understandably though no one wants to lose house.

Unsecured debt is what is an issue imo. Credit cards, loans, certain payment plans.

Btw you can get couple of years old audi for like 200-250 quid a month nowadays on payments. That said though, like you and some others I suspect that some people have debt I couldn't live with, because how else do you explain someone not even working being able to afford 2 abroad holidays a year, regular cosmetic procedures, new tech etc. I wouldn't even clock it though if the person wasn't the loudest "what do you think about my new x".