How do you feel about debt?
From a quick survey of my friends, debt seems to have the marmite quality – you either love it, or you hate it.
For some people, the idea of being in debt is terrifying. Holidays, cars and treats are carefully saved up for, and only when there are enough pennies in the pot can you splash out. For others, juggling a fistful of credit cards and loans is a normal part of everyday life, a way to manage unexpected expenses, or simply a way to get what they want, when they want it.
What I do find odd though, is that the debt-adverse people don’t seem to feel the same fear from a mortgage, or that if they do, it’s a sacrifice they’re willing to make. Isn’t a mortgage the biggest debt going? I’m not afraid of the odd loan or modest store card balance, but a 25 year debt secured against your home?? Scary stuff indeed.
The key of course, like most things in life, (I’m thinking biscuits, gin, ice cream eaten straight out of the tub with a spoon), is moderation and management. Debt is only scary when you can’t manage it – so long as you’re in a position to meet your monthly payments, does it really matter what the balance is? It’s just a number on a piece of paper after all.
I think an individual’s attitude to debt is often influenced by their upbringing. Sometimes you follow in your parents’ footsteps, inheriting the urge to count every penny, other times it can go the opposite way, provoking rebellion.
My Gran for instance, the classic rationed WWII generation, was fastidious about money, and at the end of every day would write down everything she had spent in a small, lined notebook, checking the carefully balance against the coins in her black leather purse. My mum on the other hand, has a much more ‘live in the moment’ attitude to spending – after years of being denied extravaganzas, she believes in enjoying it while you can.
I like to think I’ve inherited a little bit from each approach, (which I’m hoping means I have a ‘balanced approach’ rather than that I have some kind of multiple personality disorder). I’m not afraid of debt, but I respect it. I’m not stupid with money, but I do like to treat myself and not feel guilty about it. A little bit of what you fancy after all…
how very true. we have some debt (mainly credit cards on frozen interest and reduced payments), due to oh being out of work for 3 yrs. I now save for everything I want/need. if the bills are paid and we eat in a week we doing ok. But yes I now have more respect for credit cards and will never ever be in this position again.
I pay into a credit union every month, and if I need something I take my money out and buy it, If I want something then I do without.
Mortgages were not run of the mill back in my grandparents day, every body who wanted could get a council house, as we started off, but they just not available any more so a lot of people have little choice – either or mortgage or private rent as I do.
Unfortunately we are breeding a generation who run up the debt and then take a trust deed or equivalent to save paying it off which costs the people who are paying their bills on time more.
I think you’re right Elaine that the whole attitude to money in our society has changed dramatically over the last 50 years. I think credit unions are a really brilliant idea – they encourage a sense of community as well as just providing an alternative to high street banks.
What scares me, about debt, is how freely its given to young people in their first job. I worked in a bank for 12 years and the number of 18/19 years old who were given store cards with limits they were never going to pay off. Yes, you have ‘saved’ 10% on your purchases today but they didnt seem to realise it wasn’t ‘free’ money and just continued spending till the credit run out.
I have debt and I respect it. It can take a long while to pay it off if you aren’t careful and if you live within your means it doesnt seem to be as ‘cool’ as if you flash the cash and live for today.
I totally agree with you – store cards especially are so dangerous, and expensive too. I do think kids need to learn more about money and finance in school, so they are better equipped to plan their own financial futures.
Debt has been made a facet of modern life. Back in the day you only bought (apart from property) what you could afford to pay in cash – even countries and banks used to do that – but now it is totally acceptable to buy stuff on a credit card.
I went through some money troubles about 10-12 years ago and my bank manager (who was very good) suggested I use only cash for a month and see how I got on – it’s amazing how little you spend when you actually see the stuff slipping through your fingers!
That’s very true about the cash thing, which is why online shopping is so dangerous, as you don’t even have to hand over a card! You just type in a number – that’s not REAL money is it??
It’s, like, Paypal’s money. So it’s totally fine to spend it until it runs out.
Post redundancy baby in a cradle experience, I was like your gran and it was AWFUL so I started to think sod it and would get the kid an icecream after school.
Then last year, something flipped. The electricity bill for the previous winter started it as there was no way on earth I could control that (except freeze this year which I can’t because I’m responsible for the boy in the bedroom).
The way I “control” my debt is: No credit cards, no store cards, no looking at my online bank balance, no more facing the reality because I’ve looked it in the eye and well,…life’s too short, isn’t it?
That’s an interesting mix! No credit, but burying your head in the sand at the same time. I like it :-)
Some of you may be of interest to know if you have a genuine need and can prove that then power companies have a “charity” section for want of a better way of putting it.
I only know cos of a comment on MSE a number of years ago, I contacted my company and they were brilliant.
My scenario – we lived in a big rented house, took it on when we had 3 adult kids at home and a partner of 1 adult kid living with us. could afford heating/lighting/rent etc. They all moved out but then daughter No1 got thrown out by her partner and we took her and 2 grandchildren in, Grandson has huge medical needs.is disabled etc and over the winter due to his chest we could not use dusty coal fires but had to heat the house for his damaged lungs/bad chest. My bill over the winter period was nearly £1000, £800 more than normal. They wanted to up my payments by £100 a month to cover it, no way we could afford it as when daughter got her own house (used her first back payment of grandsons disability money to pay deposit) she moved out and needed her own money. we explained this to our supplier and they agreed to write it off if we could prove it (which we could), so as long as we paid out DD every month at normal rate they wrote off 1/2 at end of 6 months and other 1/2 at end of year. was a huge relief to both us and her as it wasnt possible to survive and pay what they wanted.