High income high debt?

[Fizzychickens]

Is this really a common thing? Trying to get my head around this.

found out that son and his wife are about 65k In debt plus a car on finance. He’s a deputy headteacher and his wife is a head of year in a high school. They easily earn 100k.

we found out about this recently and I’ve tried to discuss it with him. He just doesn’t seem worried and thinks it’s ‘normal’. I’ve never owed more than 2k, aside From the mortgage of course, so ok struggling to understand it,

he seems to think that these sorts of debts are not uncommon in higher earners, but surely that can’t be right?

What kind of debt are we talking?

No it’s not normal to have unsecured debt at 65% of your household income excluding the mortgage - let alone the car finance.

I don’t think it is either

No, not normal.

No it’s not normal but honestly it’s not your business. He doesn’t wish to discuss it with you , and so accept that.

It’s true that the higher your income the more access you have to credit and at much better terms (e.g more 0% deals), but 65k is a lot of debt.

Is that mortgage debt or non mortgage debt?

Our household income is £140K a year split up as me £80k and DH £60K

Non mortgage debt is now 0 but was £12k till last year.

And op, to clarify we are higher earners, both of us, and we don’t have debt, because, we are higher earners and don’t need it, we live within our means. That’s normal.

Apart from mortgage, not normal. Hate to think what the interest is on that.

No not normal me and DP earn close to that ( about 80 k combined) and my car loan of 15 is freaking me out. A car loan on top of 65 k would have me in a serious panic

also are they in private schools, as otherwise it is unlikely they are on 100k op. Prob more like 80 combined for their positions. As such, him giving it higher earner and is maybe they are trying to live a lifestyle they can’t afford?

Debt is only a problem when you can’t service it.

Not normal and I wouldn't consider them to be high earners either particularly. That's an extremely high level of debt.

We earn upwards of 200k combined and have two loans related to our small business- one of about £17k which is paid from the business and a 2.5k personal
Loan we put into the business. Other than that we have no debt.

Not true - a secondary deputy head and HOD of a large department should easily earn £100k in either state or independent schools.

I don't think it's normal to have that level of debt. We earn more than that and have about £11k in car finance and that's it.

No this is definitely not normal. What is the debt? All we have is mortgage, car loan and sofa. The sofa is only on a loan because it was interest free.

We make about triple that gross income as a household. If i didnt have the means to repay this i would not sleep at night

This is NOT normal unless its leveraged debt

Do they have equivalent cash in assets?

this could make sense if ALL 65k is 0% interest or very low and they have equivalent or more in high yield savings (ie stocks and shares ISA so interest is tax free) to repay the debt at a later date

If so they are "leveraging" debt which is (kind of) fine.

As an Example of this
2 years ago we had to do work on the house. It cost 20k.

We put the full 20K on a 0% credit card for 2 years.
At the time we also took 15k cash and instead of paying the builders we put it in a S&S isa against google. In 2 years that was worth 23K we sold and paid off the credit card and banked 3k.

It probably depends on the circles they move in. It may be normal to them. There is an employer in my area where wages are well above average and I know a lot of people who are tens of thousands in debt despite two good wages.

It’s a case of keeping up with the Jones’ a lot of the time. Two flash cars, multiple holidays a year, not doing up a house slowly or making do but full on renovations right away, not being satisfied with a small house, but wanting to constantly be moving up the ladder.

High income, high spend is a thing but not necessarily high debt. I’ve read here about low to mid income families driving Range Rovers and the works, so perhaps financing is more easily available than it should be, tempting people more.
£65k is a lot of debt. We earn the same and have just under £20k for home improvements and car, no mortgage.

Depends on the school. Round our way private school deputy head and HOY would earn far more. Just because its normal where you are doesn't make it so everywhere.

As others have said, depends on what sort of debt it is. We’ve got £2k on a 0% credit card that’ll be paid off before interest kicks in. Otherwise it’s mortgage and car finance. We use 0% deals quite a lot but only to avoid spending savings - I only ever buy on 0% if I know I’ve got the money saved elsewhere so I could pay it off immediately if needed

No, it’s not normal, and I’d be secretly worried and disappointed too, but it’s really none of your business and I’d hate for my mil to be interfering in our finances (not saying you are btw, just advising you to keep your opinion to yourself).

Riskier than I'd be comfortable with.

£100k as a couple isn't really in the high income bracket and no it wouldn't be normal to have that much debt on top of a mortgage. Have they had some big home improvement though such as a loft conversion or kitchen or extension which is paid for by that debt and may have increased their property value by that much too?

I think the argument over it being a big income or not is entirely dependent on where they live. If its london its not that big but where I am that would make you a high earner.

It’s between two of them .