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.

@Kinlocrhum surely on 600k per yr they are the Jones! 😁

A lot of these houses people are quoting are going to be dropping like stone very soon. No doubt about it. The good old days are gone people. Get used to living, let’s say, less well.

For most of us it probably won't have an effect. The value of a house only matters at the moment of buying or selling. If you don't plan to sell and move, the drop in house value doesn't change a thing about your lifestyle.

Like our house. We don't plan on ever leaving here unless it's in a coffin. So the value could drop to zero, and it still won't change a thing to our expenses compared to now. We're not suddenly going to have more expenses just because the house valuation changed. And before you start about changing interest rates: we fixed ours for 25 years and will have paid off the house by then. It doesn't matter, any of it.

We don't, other than the house, which is considered "positive debt".

@botedbored 🤣

Debt can be positive if managed correctly.

None, unless you count the mortgage as debt. In my 20s I got myself in some credit trouble with store and credit cards and racked up a bit and couldn’t repay. I paid it off and vowed never to have debt again. No credit, if I can’t pay out right I don’t have it. 10 years later I’m debt free and my credit rating has recovered I owe nothing except payments toward my house.

Combined income of about 55k on a good year.
£37k left on the mortgage (from 2005) which we are overpaying and hopefully will be done on 4 years. We only own 75% of the house (expensive area but the scheme means no rent..if we ever sell they recoup their 25%)

No other debt.. we run old cars quite happily, both have credit cards for very rare larger purchases (just returfed the lawn so that was £500 total..paid off same month) but mostly they are unused.

We camp in the summer, but have put 2/4 children through Uni and are now at the weddings stage..luckily both girls are frugal and did/are doing their weddings very simply. DS1 has moved to Australia and I'm saving for the trip of a lifetime when he marries .probably 2022 thanks to Covid.
I save anything left in the current accounts at the end of the month and have approx 36k saved.. that will keep us going if either loses their job.

We don't do costa coffees, have always made our own lunches and eat and live simply. I love my home, which is not an instagram home but we have made it comfortable and attractive as we can , and the only thing I;d like is a much bigger garden to grow more veg and for the dog!

The thought of big debt is terrifying to me and I'd far rather have less and just enjoy what I DO have.

I owe £550k in debt. It sounds awful but I am comfortable. I have less than 4 years left to pay as we ovrrpay by _400 pcm, on our family home. I own a holiday home in France with no mortgage. I have 6 b2l which makes up most of my debt but each of the b2l is about half paid for. The equity I have pays off all debt and would leave me £350k left. DH earns £54k and I earn £40k and we have rental income after mortgages paid of £28k. I also have savings in bank. On credit Karma it still says I have £550k debt.

None currently but have been fortunate enough to have a family to help out other wise we would still have the mortgage and paying of the windows., and eating into our overdraft.

@caringcarer are you older can I ask? I think it's usual for young people to have so many BTLs on normal salaries because lending is so much stricter now.

I did have a lot of debt about 50k but its paid of, I had a large house, split up with my ex and now have no debt and bought my 2 bedroomed maisonette outright, and have money in the bank, I didn't sleep at night, I spent my nights on debt websites worrying. We lived beyond our means and it terrified me. I am much happier with a smaller place and no debt, but that's not always possible. I had to learn self control as have Bi Polar and over spending was one of the things I did in my manic phases.

Combined income of around £40k a year. We have these debts;

£23k home improvement loan (3% apr so a pretty cheap loan). We got a new kitchen, renovated the house etc with it.

£2.5k on a credit card at 0% until the end of the year (will pay it off by then)

£136k left on the mortgage (owned for 6 years)

We own our cars. They aren't new or anything, a 2011 plate and 2012 plate, normal hatch back type.

We have about £4k saved up. I'll keep adding to it until the end of the year where possible then pay the credit card off.

I'm in your bracket.
I got married and had a nice wedding.
I had a honeymoon in an exotic location.
I bought a house and renovated it top to bottom
I had a brand new car (a couple of years ago so not brand new now)
I have taken full 12 months maternity leave including the part where i dont get paid at all.

I have no debt after my mortgage.

I paid off the last chunk of a 13k debt this month. It felt amazing. Never, ever again will I owe money like that again

Outside our mortgage we have none. We live nicely and take trips have savings etc but we pay for it all “cash on the barrel” as my DF taught.

No debt here either. DH is Muslim so debt is not an option due to interest being haram. Everything we have bought has been because we had the money saved to do so.
We own our home outright. 2 cars which were both second hand, 4 children (plus 1 deceased. Little graves and headstones cost a small fortune). We holiday in the Uk mostly but have taken the kids to Euro Disney and America.

We spend the first 10 years of our marriage working overseas to build up the best pot of savings we could. Then had 3 years in London where DH earned well but

@IHateCoronavirus that’s such a responsible way to live, just because it’s based on a religion doesn’t mean a lot of us couldn’t learn from you!

[quote botedbored]@Kinlocrhum surely on 600k per yr they are the Jones! 😁[/quote]
Ha I thought the same thing! Who is there to keep up with when you earn £600k?! The very thought of £150k on a credit card makes me break out in a cold sweat, I wouldn’t sleep at night even with that income!

Rainycloudyday thank you. It wasn’t plain sailing. As newly weds we had a couple of months of siting on deckchairs in the living room but we have a good giggle looking back at those days. Ah to be young!

None.

Well this second I owe £400 on a credit card, but I've been paid today so I'll go on my banking app at some point today and clear it.

But I'm in my 50s, my mortgage is cleared, I don't have kids and live within my means.

I'm late 20s, DH is mid-30s. We have a large mortgage and 2 student loans. I also take out an interest free season ticket with work every year. No other debts, and currently overpaying one of the student loans, also about to buy a second home in cash. I'm hoping to pay off one of the student loans next year so all savings atm are going towards that!

@Zaphodsotherhead

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.

Just being nosey, but why didn't you take out a mortgage or loan for the difference? Wouldn't the interest be lower?

Name changed for this

Household income 62k (but likely to increase by around 15k soon).
Mortgage 190k but approx 380k equity
Mid-30s, bought first house mid-20s.
I have used credit cards sensibly since I was 18 - ie never spent more than I had and just treated it as a deferred payment. Still did nice things, but was always careful and aware of how much was too much. 'Afford' seems to mean different things to different people.
In contrast, when we met, DP had spent 10 years living beyond his means in London - not cars etc, just higher rent than necessary to live in nice areas and never really saying no to things: going out a lot, several European trips a year, flying long haul to see family. He accumulated a lot of debt (and took on his ex's too) but has cleared it now and I am in charge of the family finances!

@Spidey66

The bank wouldn't have given me a loan for the amount, because, at the time, I was paying rent and very high bills. So, on paper, given my very low earnings, I looked a very bad bet to repay. Of course, as soon as I no longer had the rent to pay, and my outgoings became much lower (new house has MUCH lower bills and CT) I became better off!

I do intend to take out a loan to pay off the CCs, once this is over, as now I look a much better bet without all the huge bills to pay.

I think it’s pretty normal. A lot of people are pretty ignorant/deluded as well and don’t consider things like mortgage, student loans, car finance etc as debt for some reason or treat it as not really counting somehow.