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Original poster

Unsecured debt

153 replies

Cookiemonsieur · 29/12/2023 20:51

Cheeky question so feel free to scroll on-

How much unsecured debt do you carry as a household, and how does this compare to your income?

ours is 31k on a joint income of 72k and I’m uncomfortable with this and about to get intense with paying it back

OP posts:
Goldmember · 30/12/2023 07:30

Normally I have none, pay off all credit cards in full, haven't had a loan in 18yrs.

I am stoozing though, currently I have £8k of debt on 0% credit cards and PayPal credit, paying off min balance until the 0% ends. I have money to repay it all in 5.2% and above savings so that the debt is earning me interest rather than costing me.

Softycatchymonkeys · 30/12/2023 07:41

Household income = £110k
total unsecured debt = £6k credit card and £8k to dad = £14k

this was mostly caused by having 2 babies within 18months of each other and having an extension done which totally wiped our (big) savings pot - all in the last 2 years

luckily I’m in a job where I can easily work more hours and get paid well for it. Means I’m forfeiting time with my babies though

Jellybean85 · 30/12/2023 07:44

We were offered 0% finance on an extension we wanted which seemed crazy so we accepted lol meant we could keep the money we had saved for it safe as a buffer at no cost.
So £14k outstanding on extension
&1k on credit card

But have £43 in savings collecting more interest than paying in debt so feel happy.

Joint salary £105k (gross)

Our highest was about where yours was and it sort of got there really suddenly and snuck up on us so we've been really on it fri the last 18 months or so being more careful.

You've spotted the problem and that's the main thing you have a good income to sort it out

scoopdewhoop · 30/12/2023 08:15

Joint salary- 40-50k
Credit card debt - 5k

Not really stressed about it, I know we'll pay it off but doing a no spend Jan to make a dent in it. I wouldn't want to borrow more than this though as it will take us a while to pay off with our income.

RachelSTG · 30/12/2023 08:23

How did you get £31k of credit with that salary? Or is the debt smaller and the £31k is from high interest charges? I have about 11k of debt that keeps me up at night but no high interest and it's manageable. I also have a £63k mortgage to pay off as well, I'm 36 and would love to be debt free by 40 but unsure if it is realistic to pay off £74k (plus mortgage interest) in 48 months with my current salary. Might need to change my debt free goal to 45 years old.

Heatherbell1978 · 30/12/2023 08:30

Ours fluctuates but at the moment between DH and I we have about £7k in credit cards. All on 0% deals and being paid down. We took an £18k loan out about 5 years ago to repay joint debt that had got pretty high after my second mat leave but that's now repaid.

We also have a lease car but that's through my work rather than taking out a loan/lease.

Our joint income is £160k though. We also have a mortgage if £250k but that's obvs secured debt.

Heatherbell1978 · 30/12/2023 08:31

And as a previous poster says, MN posters all love to talk about how little debt they have and how they'd never buy on credit so don't feel too disheartened. Make a plan and stick to it.

Toooldtoworry · 30/12/2023 08:34

£17600 unsecured. 144k mortgage. Earnings on average 88kpa (my job is bonus based).

Unsecured will hopefully be repaid by the end of this year and mortgage will increase to build an extension.

Bowbobobo · 30/12/2023 09:12

I’m debt-free now but 15 years ago, when the DC were young, I had about that ratio of unsecured debt to income. It was built up unwittingly almost - basically to fund a lifestyle that I couldn’t afford alone but could if useless XH had done what he was supposed to do rather than buy fucking cars and motorbikes 😡. Anyhoo. I ditched XH and started to paddle my own financial canoe. It took a long time but the debt has gone now. I never added up how much I paid in interest as it would make me sad, but I would be sadder if I hadn’t had that lifestyle, so I wouldn’t change anything.

it sounds like you have a plan OP. Stick to it, don’t stress and you’ll be fine.

ABC09887 · 30/12/2023 09:17

We have large unsecured debts of
25k - bought fixer upper as first home and essential costs and a couple of unforeseen issues (full rewire) meant we had to overspend.

The plan is to get it down to around 5k by next year then that's it. Problem is the house still needs essential work but has to wait until debts are down.

We have a mortgage but no cars etc on finance.

sonicmum2002 · 30/12/2023 09:34

Not what you're asking OP, but have you checked out Dave Ramsey's debt snowball technique? He also says to get a starter emergency fund of £1000, so that any emergency expenditure can be met from that and not by credit card or overdraft. Good luck!

5thCommandment · 30/12/2023 10:18

£31k on £72k salary is very high. 43% of gross as debt...

I'd feel uncomfortable with anything more than about 10% of gross as unsecured debt.

My debt ratio is about 8%.

Debt wrecks lives if you don't understand economics or fall into the trap of thinking "it's fine".

Get it under control and be disciplined. Highest interest rate debt first. Avalanche approach. Live within your means, if you can't, you need discipline to cut back or earn more (change jobs or negotiate a pay rise).

Talkinpeace · 30/12/2023 13:36

1975wasthebest · 30/12/2023 07:14

£13K post graduate loan debt to student finance. The amount of interest I’ve accrued since I took it out in 2018 makes me feel a bit nervous and am thinking of paying off a bit this year. One person household with yearly income that varies between £23 - £40K.

Please don't.
Your repayments are not linked to what you owe. They are linked to what you earn.
Either pay it ALL off or stick with salary deductions.

SeattleSpacePlane · 30/12/2023 13:43

The op's posts are screaming Journo to me. Just FYI in case people don't want their anecdotes posted in a Daily Mail New Year 'UK in debt crisis' piece 😂

Sunshine2024 · 30/12/2023 13:45

£4.5k on 0% interest for 22 months on an income of £125k. It gives me sleepless nights but was for a planned purchase. Other than that just the mortgage.

ChoseARandomUserName · 30/12/2023 13:59

No debt apart from our mortgage (£115k mortgage with a £110k annual household income).
DH and I own our cheap vehicles outright, don't have credit cards and I paid my student loan off years ago. I'm 39.
No matter what income we've been on over the years, we've always cut our cloth appropriately.

Littlemissweepy · 30/12/2023 14:00

Never had unsecured debt until last year, and now have which is about 15% of my gross annual income and makes me feel pretty sick.

Ratfinkstinkypink · 30/12/2023 14:01

I'm debt adverse because I lived through bankruptcy with my ex-husband so I have none. Single person with one child.

hangingonfordearlife1 · 30/12/2023 14:42

absolutely no debt, no mortgage house is paid off. aged 40 and 44. Household income 70k. Savings of about 40k but no pensions.

Chateau13 · 31/12/2023 08:18

Happily both working away in our late 50’s DH on good salary Company car then one day GP says his blood pressure Sky high and needs to finish work. One year on full salary then nothing. If we’d had debt I don’t know where we’d be. Had insurance turns out sold incorrectly so not covered. Thank goodness nearly every penny I’d earn had been overpaying the mortgage. I was then made redundant as Company went under. Debt would have sunk us.

PinkMimosa · 31/12/2023 08:23

Cookiemonsieur · 29/12/2023 21:07

Would it be fair to say that mumsnet posters tend to be more debt averse?

I don't know if it's all MNers or the ones who tend to post on here.

£32 is definitely doable and I think you're doing the right thing in tackling it.

I work in debt and unfortunately see people who lose everything over a debt like this when a sudden change in circumstances alters their income.

You are definitely doing the right thing Wink

Peacheroo · 31/12/2023 09:02

That's a lot but can be dealt with over time. Just don't add to it.

DP is a financial saint - what a prick 🤣. Very much of the "if you can't afford it, you shouldn't have it" type. So zero debt and savings that could pay off the mortgage but currently invested.

Me - I'm terrible with money. One of the reasons we keep our finances separate. I have a car loan with 6k left on it, £7k on an interest fee balance transfer and a credit card I keep racking up and then balance transferring - approx £1500 on that. My dad told me off on my birthday that I need to grow up. How can I be nearly 40 with debt. However, he didn't buy his first house til he was 40 in the 90s and my mortgage is nearly paid off so he's also not one to judge.

Joint income about £95k. My earnings about a third of that.

KievLoverTwo · 31/12/2023 09:12

A 10k loan and 352 a month car lease. A smidge under 110k salary. But we have savings for a house purchase and when that is done, we will pay that 10k loan off in full, probably 3.5 years early, then save to buy a car when the lease expires in 2027.

It's a decent car and I wanted the security of no unexpected repair bills.

No kids, so saving is quite a bit less painful than for some others. But we are a single income HH so a ton of it is tax and NI.

Lilybetsey · 31/12/2023 09:14

£50k on an income of £240k . All a business loan. Deeply unsettling as previously had none