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Original poster

How many of you have racked up huge debts?

131 replies

Twiglett · 16/09/2007 08:44

OK, up front I appreciate that this could be taken as an arsey thread but its not meant to be.

I was brought up not to borrow money and our only debt is our mortgage because quite honestly we were scared to incur other debts and went without instead

I find it difficult to truly understand whether this whole 'looming debt crisis' is for real or a media-invention

Do people re-mortgage every time their house value goes up, have you racked up loads on credit cards and taken personal loans every time they're offered .. if so why?

OP posts:
berolina · 16/09/2007 09:44

dh and I both borrowed from relatives to enable us to finish our studies, and if we were in a position to buy we would take on a mortgage, but debt for consumer goods is out of the question for both of us. We're not well-off, either - but don't have any money worries, as in we can pay the rent and bills and what ds needs and save a bit too. We make do (but there's nothing we really miss atm, tbh - it would be nice to be able to go on a 'proper' holiday now and then, but that can wait).

Gobbledigook · 16/09/2007 09:45

Twig - we only have a mortgage and we owe my dad a bit but that's it. We don't have credit card debt (we put everything on our credit card but it's automatically cleared from our account every month) and we don't have any loans.

There's a difference though, I think, between manageable debt and unmanageable debt. Our mortgage is quite big but we don't struggle to pay it - it's not something I even think about - it's certainly not a concern to me.

berolina · 16/09/2007 09:46

We are extremely lucky, though, in that in Germany renting is a decent, secure option and in Berlin in particular you can get good housing for relatively low rents. We do only have a 2-bed, gardenless flat with (soon to be) 2 children, which isn't always easy, but it's a lovely, fairly spacious flat in a nice-ish area and my botanic garden season ticket is my best friend

WideWebWitch · 16/09/2007 09:46

Agree GDG, ours is totally manageable and we have more coming in than we have going out, which is important.

Gobbledigook · 16/09/2007 09:47

I was talking to my friend the other day about paying for flights - we haven't flown for a while and I couldn't remember whether you pay for them all at once or whether you paid deposit first/balance later - when she said it was all at once I said 'oh well, I'll book those in a few months time' as we are paying for house to be painted, nursery fees, just paid whacking gardening bill and on it goes. She said they just bung it on a credit card.

Oooooh no. I can't do that!!!

Boogalooblue · 16/09/2007 09:48

I agree glitterchick, i am horrified by the adverts on childrens television, so much so that now my 4 don't watch tv any more .

We owe loads on our mortgage but have no other debts, I do not understand how people can sleep at night even if they have an overdraft,

We budget and if we can't afford something then we wait, I buy second hand and I am in the process of sorting out a veggie garden so that we can eat home grown and both save money and avoid chemicals at the same time.

We do not take exotic expensive holidays and have never understood why people feel the need to max out their credit cards to do so.

By being so cautious over the years it has meant that we are able to live in a lovely home as we have always thrown any extra money at the mortgage.

Gobbledigook · 16/09/2007 09:51

I hate that ad that says 'for everything else, there's Mastercard' - it even makes me, admittedly only for a nanosecond, think 'everyone else does it, we could have the loft done!'.

Someone with less willpower would just say 'sod it', get a card and go shopping!

There is nothing worse than struggling for money - I've been there (just starting out, first mortgage etc) and I never want to go back to it, it's horrible.

quickdrawmcgraw · 16/09/2007 09:56

One of the main problems is our 'because I'm worth it' ethos we have this side of the world. We feel we're owed all these 'things' for no good reason and work up huge debts to pay for them.
I'm often in a little bit of debt because I have an irregular income but feel sick till I've paid it off again.
I can't get over the amount of Debt Crisis ads there are on TV. When the fake couple come on with furrowed brows talking about how sad they are that they're in debt dd shrieks at the TV 'STOP BUYING THINGS THEN!'

gess · 16/09/2007 09:57

It's not do with just will power though is it. The last big credit card purchase we made was for 6 months therapy for ds1. It was over 3 grand. We sat and talked about it. We knew we couldn;t afford it, so the discussion was on whether or not it would be likely to benefit ds1.

It has benefitted him eormously. Even the walking on Dartmoor (thread in SN a few weeks ago) was a direct result of this therapy and I would say has been life changing for him and me. Being able to sign, direct result or the therapy, his first 2 clear words (ear and eye) direct resutl of the therpay, imitation (huge developmental leap, which has made an enormous difference to his family interactions) direct result of the therapy. Well worth 3 grand debt.

Not EVERYONE runs up huge debts having a show home (my house looks like a student let) or going on holiday (we haven't had a family holiday since 2003- and that was camping). Sometimes people run up debts because there are things they feel have to be paid for and done.

Gobbledigook · 16/09/2007 09:57

gess, no, I know that. Of course there are circumstances where it's unavoidable

SleeplessInTheStaceym11House · 16/09/2007 09:58

do people honestly see a mortgage on the same level as credit card debt?

to me a mortgage is unavolidable, you'd be paying the same amount in rent, a mortgage to give you some return is surely a better option, rather than paying your landlords mortgage!

whereas creditcard/loan debts are avoidable. (you all know how much we owe, through no fault of mine) and believe me once i take control of all the finances we will never be in this debt again!

but wer'e keeping the mortgage, our house is the only asset we have!

SleeplessInTheStaceym11House · 16/09/2007 10:00

gess i feel your situation is entirely different to many though, these are things yes your ds could do without, but will benefit his well being and health/happiness, a plasma tv doesnt acctually do that does it!

similarly if i had to use a credit card to buy food for my children i would, because they need it1

mrsflowerpot · 16/09/2007 10:01

We have a biggish mortgage but affordable and nothing else. A few things go on the credit cards during the month but we clear them every month - we were told by financial advisor that not having any debt affects your credit rating adversely which seems mad.

We manage our money very differently now to when we were younger - we are running dh's aging but serviceable car until we can afford to pay for a replacement outright for instance whereas pre-kids we'd have got a loan for it. We had a year after we got married and bought our first house when we had run up quite a lot of debt paying for everything and every spare penny went to paying it off - we could afford it and we paid it off in a year, but I don't ever want to do that again.

ThePigletGuru · 16/09/2007 10:01

gess, your circumstances are different, and I can't imagine anyone would berate you for your debts, given the circumstances under which they were accrued.

gess · 16/09/2007 10:02

oh well have a look at the photos on my profile- a few months ago I was asking advice about major buggies/wheelchairs as he was uncontrollable out and about. Now we go hiking. It's well worth every penny. It's just been years and years of it. Some people get funding for these programmes but you usually have to self fund for a year to a tune of over 20 grand to prove it works (plus lawyers fees to get through tribunal). We just couldn't afford that.

(TBH the way that debt racks up isn't so much the capital its the interest- I'm about to do a big ebay clearout- everything I make will go into paying off cards to bring the repayments down).

WideWebWitch · 16/09/2007 10:03

Er a mortgage IS DEBT, whether you like it or not. You have an asset to show for your debt but it is still debt. And if house prices go down you could potentially have an asset that's worth less than you paid for it or owe on it (negative equity, I think everyone's forgotten that exists). I'm not suggesting it's exactly the same as cc debt but it is debt.

And cc debt if it's on 0% is fine imo.

WideWebWitch · 16/09/2007 10:05

And actually, we pay a LOT less in rent than we'd have to pay if we had a mortgage. So that argument (that it's always cheaper to buy than rent) is not always correct

mrsflowerpot · 16/09/2007 10:05

gess, that's entirely different - and how utterly utterly wrong that your ds wouldn't have access to all those things unless you are able and prepared to fund them yourselves.

SleeplessInTheStaceym11House · 16/09/2007 10:08

www, i know its still debt but i dont see it on the same scale.

i know if i owned all of our flat we'd be paying less than what we pay now in mortgage and rent!

lucykate · 16/09/2007 10:10

we have a big mortgage but don't use credit cards, don't have any other loans atm, and nothing bought on hp, we do have some savings but only a small amount, enough for if the boiler went we could fix it.

if we need something, for larger items we save up for it. for kids toys and clothes, i go to a lot of jumble sales, charity shops, car boots etc. i like being thrifty.

we do go overdrawn a bit at the end of each month, but that is down to making a life changing re-location last year, its taking us a while to get back on track but we're getting there.

berolina · 16/09/2007 10:11

My impression of Britain (from afar atm) is that renting is just often not seen as a viable option - I think in part there is a bit of a property obsession, but also renting is just not well protected eough legally. I always shudder when threads on here appear about how easy it is in some instances to be evicted. Over here it is very difficult. There is also, of course, the argument that when renting you are effectively throwing money away, but I don't see it like that, and feel comfortable not having a mortgage. (It also makes moving easier).

NannyL · 16/09/2007 10:11

My only debt is my mortgage and my student loan...

(but i dont count my student loan as i make more interest on the money in the bank than the interest they charge me!)

I use credit cards all the time for everything.... credit cards with the best cash back rate so i actually gain £ by using them. I have a direct debit set up so they automatically take the whole balance every month and so i have never ever paid any interest!
I have a different credit card that i use only for petrol as it gives me 2p off per litre

When i took out my mortgage i put down 20% of the value of my 3 bed house. Now my hosue has gone up in value i own about 40% of it 'out right' and the morgage is just about 60% of the value of the house. (i dont think i could afford higher mortgagte repayments though.... unless i worked 5 days per week instead of 4 ) (luckily my fixed rate is fixed for anotehr 4 years and 2 month and its a bargain rate)

i could NEVER take on any other debt. Even when i buy a new car i will pay for it in cash, as i have paid for my other 2 cars.

ThePigletGuru · 16/09/2007 10:11

gess, your DS looks much happier hiking up Staple Tor than I was last time DH dragged me up there!

Sleepless, of course people have mortgages. And more and more people have almost unsupportable levels of mortgage debt because of the ridiculous level of house prices. But then to rack up lots of credit card debt on top... terrifying.

Good Telegraph article here

SleeplessInTheStaceym11House · 16/09/2007 10:14

ThePiglet, very true, i dont see how mortgage companies are lending more and more for your wage. we managed to get just over twice dhs wage and i wouldnt be happier with anymore atm, although we could pay more as i say as we are paying rent too.

gess · 16/09/2007 10:15

pigletguru There was firing so we had to stop at Great Steeple, ds1 was ready to march to Okehampton!

Seriously though this would have been impossible & unthinkable even 2 months ago. Now we go up on Dartmoor all the time. I would have paid triple to have given him this one thing that he can access and enjoy.