To think getting into debt is incredibly easy?

[Username1917]

I had a comfortable upbringing, parents taught me “don’t buy what you can’t afford, saving is important” etc.

I got a job at 18 and a few months later was offered a credit card by my bank, for the first few months I paid it off in full religiously. Then I thought well I’ll just pay half this month and half next month, no big deal! Then it spiralled and I thought oh I’ll just switch to an interest free deal and pay it off before it ends. Then when the interest free deal expired I got a loan over 5 years because it was “much cheaper” per month.

Before I knew it I had debt (including PCP car) the same level as my salary, at the time that seemed very manageable.

I’m lucky that I have a well paid job now and have paid it off in full. It’s given me a right kick up the bum and now I have no debt, but AIBU to think this is not uncommon, even having grown up with parents that tried to teach me about money?

Yep. Desperate need for better education and better regulation.

Yes incredibly easy, and then there is a whole lot of judgment if people mess up.

I can't believe how much some of my colleagues are paying for car loans, makes my eyes water!

Financial hardship aside (as that is very different), it's easy to get into debt if someone asks for credit and then chooses to spend it without paying it off.

Credit is a service and has its place. People should do their research before signing up to credit, and in my opinion certain selling tactics should be stopped, such as offering 15% off if you open a store card.

Yes, ridiculously easy.

I took out a £190,000 mortgage when I bought a house with exDP.
We then split up. I became a single mum and really struggled on my PT salary. Took out a £5000 loan to get by and buy essentials like furniture for my new home.
Then my 14 year old car died. Had to buy a new car on PCP as had no savings - this was £7500.
Also have £42,000 student debt but this is a tax so don't count this, as I don't even earn enough to pay it back.

By Jan 2020 my debt in total was £245k. Or £12.5k 'real' debt - i.e. loans that need repaying urgently.

I've managed to get this down dramatically. ExDP has bought me out of the house we bought. Student loan, still don't earn enough to pay back. My £12.5k loan I have managed to reduce and now have £7800 left to pay off. Hoping to be done in 2/3 years.

It's very very hard nowadays to get anywhere I think. Money is hard. I don't buy clothes or have treats but debt is so hard to shift.

It really is.

I was bankrupt at 24.

Circumstantially I had a severe health issue that meant I kept having time off work and ran out of sick pay, but didn’t entitle me to any disability benefits. So I was having to use loans and credit cards to pay for rent and food. Also ineligible for any other benefits.

There isn’t anywhere near the safety net in this country people perceive there to be. It was either accrue debt or become homeless. Nobody around to help.

It was the best thing I could have done tbh, was about £6-7k but at that point the repayments were killing me and I didn’t have any hope of pulling together that kind of money in the foreseeable.

I also didn’t know anything about the debt spiral until well into my debt. At university the accounts all gave you interest free overdrafts as standard, which then converted to interest accounts a while after graduating. Took a loan to pay that off, then a credit card for food when the loan payment swallowed up my spare £70 per month after bills and rent... absolutely vicious.

I’m in a great place now financially, which I never thought I would be. But unless you have family support or earn enough to have a healthy savings account any one of us could find ourselves in debt a few months or years from now.

Totally agree. They need to show kids money management.

Very easy to get into debt and very hard to get out.
And I don't remember ever being taught anything about how to manage finances, and I'm sure I'm not alone.

My parents brought us up that credit was bad, something to be ashamed of, as it was back then.
So I grew up like that and have raised our kids like that.

I would find it very difficult to get into debt because I refuse it. I'm not smug or thinking myself better than anyone who does have credit it's a personal choice.
Obviously very few people can afford to buy a house outright, but we went for the low end, could have borrowed twice as much.
I couldn't sleep at night as I'd be worried about having to manage it all, so simplicity was another reason.

We are all different though and I like that threads like these see both ends of the spectrum.

Depends. Financial services are already very strictly regulated and grown people should be responsible for reading/researching and considering finances.

If someone is in a tough position (job loss, illness, becoming a single parent, caring responsibilities) then yes I can imagine it's easy to get into debt and you don't have a choice.

But many people don't need a car (or if they do, why not get the cheapest one), a credit card, a huge overdraft, who knows what else. Way too many people get into debt over gadgets, holidays or things that are luxuries. So many people in debt/skint but with iPhones and huge flat screen TV's.

Unless someone has learning difficulties/mental disabilities they should be capable of managing their finances (as I said, I don't mean this applies to people in genuinely difficult situations).

@FindingMeno

Very easy to get into debt and very hard to get out. And I don't remember ever being taught anything about how to manage finances, and I'm sure I'm not alone.

Hmm. I know I was; by my parents and via classes at school aged 15-16, 'How money works'.

Rather like how many on here laugh about what fun they had at school, how many boys they snogged, and what a gas it was skiving and baiting their teachers- many were told; only some listened.

It's sort of up there with 'contraception' 😂

'Totally agree. They need to show kids money management.'

This x100 ^

Yep, I was cold called with a credit card when I was 18 and it set me off on a long road of unmanageable debt. I'm free of it now but I'm not going to make the same mistake with my kids.

I had a severe lack of guidance from my parents. My Dad was horrendous with money and was in financial ruin for most of my teens.

As a consequence I was completely clueless. At 18, the bank gave me an overdraft of £500 which I thought was free money so I promptly spent it and then continued to spend recklessly on a credit card until I was about £5000 in debt which took me about 2 yrs to pay off.

I got into further debt in my 20's, a result of having a 'fuck it' cavalier attitude to money.

I've sorted myself out now though. No debt and a healthy amount of savings but it's taken a long time to get there.

I was approached numerous times at eighteen as a student for credit cards, even given one by my bank alongside my student current account, just cut it up and didn't use it.
I understand debt and how easy it is to spiral if circumstances suddenly change, loss of job, divorce, ill health that impacts earnings etc, but lots of people I know when we were all under 25 had debt for new cars on finance, the latest I phone, putting nights out on credit cards etc. I had a lot of fun when I was that age, I had an old car I bought for cash, plenty of holidays with friends on a budget, and got a new phone when the old one broke rather than upgrading early to the nearest model for several hundred pounds and an extortionate monthly contract because Carphone warehouse offered. In my student jobs I was always willing to work a bank holiday shift for double time, work the Saturday night in the restaurant for better tips and go out another night/after my shift etc. I just lived within my means.

Agreed. Especially as a young person full of enthusiasm for the world plus access to credit? I don't know how it is now but back in the early 00's it seemed so normalised.

Who are "they" who should be teaching kids about money?
We did it ourselves started about aged 12 and added a bit more as they got older.
Yes, they'll always be some parents who don't teach their kids, but at least if you do it yourself you know they understand.
It's worked for mine up until now, fingers crossed and that.

I agree we never had bad ant classes on this at school. I didn’t know what compound interest was etc and got myself into a real mess. Store cards, overdraft, credit cards, loans...all fully repaid now.

@Devlesko

Who are "they" who should be teaching kids about money? We did it ourselves started about aged 12 and added a bit more as they got older. Yes, they'll always be some parents who don't teach their kids, but at least if you do it yourself you know they understand. It's worked for mine up until now, fingers crossed and that.

The government, the next generations only functional parent in a lot of cases

Pretty much how I got into debt. Family had always had credit eg household items on ‘hp’. So at 18 I got a credit card already had a small store card.

The credit card was slowly ran up with not paying it off, then it became a loan, then I continued to use the card too. Then before I knew it in my late twenties I had a full card, overdraft and loan. I was on a low wage as a nursery nurse ( think 3-4 an hour 20 years ago). It took me well into my 30s to pay off, never defaulted just went without other things.

At 41 I’ve now only got a joint mortgage. Which we overpay. Never again! It’s very easy to get into debt, I was young an poor and it was basically ‘free money’ but really not!

It's not just money management though, it's so complex. Nowadays even children/teenagers are so exposed to "aspirational living" and materialism, and "keeping up with the Joneses" is so much part of their lives.

The early and easy access to credit - with little to no explanation of the risks - is scary. Look how many Insta influencers work in partnership with Klarna for example!

Hmm. I would normally agree, but wondered what it was that made you decide to stop paying off the credit card when you obviously prioritised that to start with. I can understand that people fall into this situation through hardship but it seems as though you decided to let it build up, even though you had been taught to manage money. So I’m not sure what the solution should be, other than banning/limiting credit cards, but people like to make their own choices. Perhaps they should not be allowed until 21 rather than 18. I’m also not sure that learning about taking on debts is right for school - most of the people I know who are paranoid of getting into debt never learned this skill at school. Indeed one important lesson that is definitely covered in school is reading the question thoroughly and if you don’t bother, you risk getting things wrong. I guess we all take that risk when we don’t read the small print.

I guess I've never understand the 'free money' thing when it came to overdrafts and credit cards. I wasn't taught by my parents to be sensible with my money, but I knew that if I spent £100 I'd actually have to pay £115 the next month to pay it off - wasted money. I have a planned overdraft of £150 which is manageable for worst case scenarios, and I hardly ever dip into it.

Yes. I think it's criminal.

It bloody is.
At one point in the early 2000s I had credit limits of 45000 spread over 4 cards. I didn't even earn that much.
Interest free, buy now pay later etc etc it's bloody endless.

The early and easy access to credit - with little to no explanation of the risks - is scary. Look how many Insta influencers work in partnership with Klarna for example!

Yes I think klarna is a very shady idea. People wouldn't consider it a debt, but it is, and its available for so many non essential things. Is it really worth getting into debt over designer kids clothes, for example?

The other issue is overdrafts when people don't really understand what they are. At university a lot of my friends treated their overdraft as free money, an extension of their account.

At least pay day loans seem to be less popular now.