How much in debt are you

oLoonatic

I wont go through all the comments here. But we were in debt (family of 4 with 1 income). Luckily bought our house at the bottom of the market and i mean LUCKY!!! but we took loans off banks and family, paid everything by direct debit, Ate too many chippers and were living pay check to the day before paycheck. I've literally gone hungry.

The thing that worked for us was Dave Ramsays money makeover. Yes its americanised and full of buzz words. But if you can look beyond that its fantastic. I followed it to the letter, (with the exception of investing in some sort of american bonds that isn't relevant to Ireland). Within 12 months the only outgoings we have is our mortgage and Utilitiy bills. Everything else is paid upfront by saving. Our quality of life is incomparable.!!

DrPhilG

It's funny how people change in regards to money.

When I was in my early 20s I was shocking with money. £6k+ on credit cards. I remember getting out on my lunch break, going to the bank and taking cash out of the credit card account, lodging it into my current account, so it would have enough cash for the minimum credit card payment the next day.

Now at 40, I'm ridiculously sensible with money. I budget for everything. Set aside money each month for all the big occasional or annual bills and I've got about €5k in the CU for emergencies. So when I need oil, I have cash built up for it. When the car/house insurance is due, money is there.

I'm overpaying my mortgage, putting money into 2 savings accounts monthly and I only have a few hundred quid on the credit card which will be cleared at the end of the month.

If you'd told the 20 year old me that I'd be this well organised at 40 I'd have laughed at you.

PS it's not just that I'm well paid so it's easy to do that. My wife and I work 2 jobs each, household income is less than €50k net.

sbsquarepants

CivilCybil wrote: »

I work in financial services so am a bit wiser than a lot would be. The actions of the financial institutions encouraged a lot of people to get into debt.
I remember getting a credit card with a 1k limit and them automatically increasing the limit year in and within 3 years my limit was 6k.

What really shocks me is that people are somehow surprised by this - banks make money from punters borrowing and paying interest, why on earth would they not be inclined to maximise their profits?

It is up to people to look out for themselves at the end of the day, caveat emptor and all that.

I have borrowed on the QT well in excess of the bank rules to get the house i wanted, but i done so in the knowledge that if it all went (or goes as the case may be) tits up i can chop and change a few things and i'd be ok, my shiny new house will not get repossesed, nor am i about to start clutching pearls and claiming i was a victim, my arse is covered - sometimes you just have to bend the rules a bit!

DrPhilG

I was unemployed briefly in my early 20s and I think that was the turning point.

Had to sell PlayStation and anything else I had to pay the rent.

I remember living on pot noodles for a few months. A treat once every few months was to bust open the change jar, count out the shrapnel, and if we got up to £6 then we'd be able to rent a DVD and split a chicken curry special.

Being that skint is an eye opener. And I'm under no illusions that there are others in a far worse place financially.

Ush1

Wanderer78 wrote: »

It ll be interesting when the financial sector finally accepts responsibility for its immoral and unethical behaviour

That's a regressive victim mentality you have there.

Ush1

Ush1 wrote: »

That's a regressive victim mentality you have there.

Yeah ............. waiting/expecting for the "financial sector finally accepts responsibility for its immoral and unethical behaviour" is fairly loony. Each to their own.

The central bank have acted to a degree and the FS sector is now in line, the rest is water under the bridge.

hoganj

oLoonatic wrote: »

The thing that worked for us was Dave Ramsays money makeover. Yes its americanised and full of buzz words. But if you can look beyond that its fantastic. I followed it to the letter, (with the exception of investing in some sort of american bonds that isn't relevant to Ireland). Within 12 months the only outgoings we have is our mortgage and Utilitiy bills. Everything else is paid upfront by saving. Our quality of life is incomparable.!!

I started watching his YouTube videos about a year ago, they really are interesting. Also interesting to hear an Irish perspective from someone who has actually followed his method. He is very up front and to the point, but that is how you have to be in reality!

Wanderer78

Ush1 wrote: »

That's a regressive victim mentality you have there.

the financial sector could potentially be one of the most dangerous on this planet, a large proportion of its activities is truly predatory and parasitic in nature, causing a large proportion of our most critical of issues, it also has the potential to cause the extinction of our species, theres plenty of evidence to support this

You really need to ease off the podcasts.

Wanderer78

Joshua Ruiz 2 wrote: »

The financial sector does not have one hive mind.

There are ethical people in the financial sector, and also unethical, like in all walks of life.

as economist bill black would say, theres plenty of evidence to support, behavioral issues such as Greshams dynamic is rife in the financial sector, causing a large proportion of activities within the sector to be extremely unethical and immoral, and potentially dangerous for all

Berserker

Zero for me also and I've never taken out a loan in my life. Have no mortgage and we've no desire to buy a house here, unless the prices come down to a respectable level. We are well off but we are also very prudent when it comes to spending money. Have a good chunk of money saved also.

Berserker

CivilCybil wrote: »

I also grew up poor and am careful with money.

A few people mentioned this. What has growing up poor got to do with your attitude to money? Money was never an issue for my parents. Ditto for my wife's family. They are very wealthy. My wife and I are very careful when it comes to spending money.

Sloppy_Joe

ted1 wrote: »

Mortgages are the easy part, a wife and kids are where debt comes from

I’ve never had ballet lessons but I’ve spent a fortune on them!!! Many other examples.

That's why I don't think I will have kids, **** it, life is difficult enough with a disposable income and normal costs.

Sloppy_Joe

JohnCleary wrote: »

80k is hardly anything to brag about

It is for many of us who are on 40k.

Lollipops23

About 5k of car loan/credit card. Actively working to have it all cleared early next year so I can actually save some money.

Ush1

Wanderer78 wrote: »

the financial sector could potentially be one of the most dangerous on this planet, a large proportion of its activities is truly predatory and parasitic in nature, causing a large proportion of our most critical of issues, it also has the potential to cause the extinction of our species, theres plenty of evidence to support this

Go out for jog mate, try to think positively.

NSAman

facehugger99 wrote: »

Why would I begrudge you .

It's absolutely necessary to me to have people like yourself willing to shell out mad money for new cars. It allows me to pick them up a few years later for a fraction of the price.

I do think however you need to stop looking for validation from external sources - why do you care so much what your work colleagues or internet randomers think of your choices? Why do you need to drive a €50k car to feel special?

Do you ever buy a round in the bar? Or are you the one who runs out to the loo when it is your turn?

ELM327

NSAman wrote: »

Do you ever buy a round in the bar? Or are you the one who runs out to the loo when it is your turn?

That's a poor investment.
Thankfully someone else takes the hit for him.

Beasty

When I started out working I built up debt that, excluding mortgage, would equate to around 50% of salary.

Life moved on, salary and other rewards improved. House moves were made, but increasing amounts of mortgage paid off. last one was fully paid off 2-3 years ago, but could have been sooner - the interest rate was so low though it was a cheap way of investing in other assets

Now I'm probably spending what I earned 5 or 6 years ago, and my balance sheet is completely free of debt whilst still reflecting some substantial assets (property, pensions and financial investments)

Wanderer78

Ush1 wrote:

Go out for jog mate, try to think positively.

Tis all good here butty, thanks though

ToxicPaddy

Alyssa Pitiful Aeroplane wrote: »

This sentence really captures what I was saying. “Buried under debt” really brings up images of someone stressed, unable to sleep, really in a bad way due to having loans.

The reality is most people don’t even think about the loans. They are comfortably paying them off, they are enabling them to have things they would have to spend impractical amounts of time saving for and they are enjoying life. Doesn’t stop then having pensions or planning for retirement either but I do think some people are overly concerned about retirement rather than enjoying life up to that point.

I agree retirement planning is important but I’m not too gone on the idea of tying up large amounts of money that can’t be accessed either.

It also depends on the current situation. I was paying a pension in my last job (it was compulsory) and for a relatively small contribution my employer was butting about 6 times more into it. I changed jobs and my current company has no pension plan or make no contributions etc so I would have to make a much bigger contribution myself. At the same time I’m currently preparing to build a house and have some other expenses so I made the decision to hold off the pension for now as the money is more important now than in many years time. I put it this way, I need to keep my regular savings going for a mortgage app and if I was paying the pension I would have to cut the amount a lot or completely.



Do you never enjoy actually spending money and having some nice things? What’s the end goal of saying so much and putting so much into a pension, money is no good unless you spend it imo.

I live comfortably, still enjoy my hobbies and if I want something I just save for it and buy it. I'm not forsaking anything major in my life by putting money into my pension or clearing my mortgage early. I just live a relatively simple life and enjoy the life i have.

ToxicPaddy

Beasty wrote: »

When I started out working I built up debt that, excluding mortgage, would equate to around 50% of salary.

Life moved on, salary and other rewards improved. House moves were made, but increasing amounts of mortgage paid off. last one was fully paid off 2-3 years ago, but could have been sooner - the interest rate was so low though it was a cheap way of investing in other assets

Now I'm probably spending what I earned 5 or 6 years ago, and my balance sheet is completely free of debt whilst still reflecting some substantial assets (property, pensions and financial investments)

Been there donw that and have a wardrobe full of tshirts. My debt was crippling me and I was juggling money to pay one and then pay the other, doing loads of small bits of work on the side and even took a second soul destroying job for about 8 months while I figured out what approach I needed to take and plan everything out.

I swore I would never put myself into that position again and I haven't.

Plus my outlook on life has changed completely, I couldn't care less about the latest designer gear or flashing the cash to impress those around me. If anything it humbled me a fair bit and focused me on what is important.

Yes I still go out to nice restaurants and like my nice wine, go on a few holidays a year and do buy myself nice stuff, but I save for what I want and I work hard but earn a very decent salary with lots of perks which I'm grateful for.

CivilCybil

Berserker wrote: »

A few people mentioned this. What has growing up poor got to do with your attitude to money? Money was never an issue for my parents. Ditto for my wife's family. They are very wealthy. My wife and I are very careful when it comes to spending money.

You've quoted me but I was actually agreeing with you. My next line was that other people grow up poor and are terrible with money.
Said in response to another poster who said they grew up poor and as a result are good with money.

Stacksofwacks

Debt for me is very much a double edged sword. If you have a lot of it it can be like a chain around your neck. If you have none its very hard to do certain things. I think you should avoid debt unless you really need it. Im talking personal debt rather than business debt which is a different conversation. Holidays and cars you should try and pay for yourself if you have enough income. Credit cards are a no-no. Once off events like weddings/honeymoon/renovations you should try and pay for yourself but maybe borrow partially. If you want to own your own home then debt is almost unavoidable but at least you are investing in an asset. Live within your means and you should be fine.

Assetbacked

6541 wrote: »

I am wondering can you play the debt game.
So interest rates are low, anyone know a good debt strategy to actually use debt to make money.

Borrow to buy sterling. Brexit won't happen or else will be very soft.

ELM327

Stacksofwacks wrote: »

Debt for me is very much a double edged sword. If you have a lot of it it can be like a chain around your neck. If you have none its very hard to do certain things. I think you should avoid debt unless you really need it. Im talking personal debt rather than business debt which is a different conversation. Holidays and cars you should try and pay for yourself if you have enough income. Credit cards are a no-no. Once off events like weddings/honeymoon/renovations you should try and pay for yourself but maybe borrow partially. If you want to own your own home then debt is almost unavoidable but at least you are investing in an asset. Live within your means and you should be fine.

Why is borrowing OK for a big party or doing up the house, but not for a car?

Wibbs

ELM327 wrote: »

Why is borrowing OK for a big party or doing up the house, but not for a car?

True enough E. I suppose yet again it's down to personal choice and financial outlook and it should be. For me personally doing up the house is adding value to said house(though usually not nearly as big a return compared to outlay), a big party I'd be very wary of, but I suppose it depends on scale, and good memories can be priceless, but for me borrowing on a new car, an instantly and rapidly depreciating asset has always struck me as financially unwise. I am glad people do, because then the secondhand car market wouldn't be so vibrant and "bargain" rich. Never mind it keeps that industry going, but I could never personally understand it on the individual level.

Funny enough though I can understand it in your particular car's case E. The Tesla being a new technology and it being cool to get in on the ground floor of that. There's quite the bit of value added there. The same loan on say a brand new BMW oil burner, much much less so. I can see it if someone has gotten in early on the new car conveyor belt and swapping out new for old results in a small enough financial hit.

I can see the motor industry moving more and more into the new car churn on credit paradigm(I felt icky typing that word. ) as it suits them so much more financially. Increasing the complexity of cars and increasing the prices of spare parts and long term maintenance plugs into that and makes it, or appears to make it more expensive to keep a car for longer. The financial sector including the insurance business will be glad to help out as it suits them too.

Another part to this I reckon is because we've all grown up for the most part surrounded by "easy" credit and that's the background noise to most of our financial lives for good and ill, so it can be hard to look at it from the outside.

ToxicPaddy

Wibbs wrote: »

True enough E. I suppose yet again it's down to personal choice and financial outlook and it should be. For me personally doing up the house is adding value to said house(though usually not nearly as big a return compared to outlay), a big party I'd be very wary of, but I suppose it depends on scale, and good memories can be priceless, but for me borrowing on a new car, an instantly and rapidly depreciating asset has always struck me as financially unwise. I am glad people do, because then the secondhand car market wouldn't be so vibrant and "bargain" rich. Never mind it keeps that industry going, but I could never personally understand it on the individual level.

Funny enough though I can understand it in your particular car's case E. The Tesla being a new technology and it being cool to get in on the ground floor of that. There's quite the bit of value added there. The same loan on say a brand new BMW oil burner, much much less so. I can see it if someone has gotten in early on the new car conveyor belt and swapping out new for old results in a small enough financial hit.

I can see the motor industry moving more and more into the new car churn on credit paradigm(I felt icky typing that word. ) as it suits them so much more financially. Increasing the complexity of cars and increasing the prices of spare parts and long term maintenance plugs into that and makes it, or appears to make it more expensive to keep a car for longer. The financial sector including the insurance business will be glad to help out as it suits them too.

Another part to this I reckon is because we've all grown up for the most part surrounded by "easy" credit and that's the background noise to most of our financial lives for good and ill, so it can be hard to look at it from the outside.

The motor industry like any other industry has moved to a more disposable format. In a few years the chances of actually being able to do major repairs or upgrades on cars will be so financial unappealing that most people will go buy a new or nearly new car instead.

It will be like home appliances, designed to last x no of years and then we buy a new one. No point repairing it as either you cant get those parts or it's so expensive to do, it's better to buy a new one

The offer of cheap credit, ease of applying and everything being pretty much instant could see whole packages being offered by dealerships where you buy a car, get insurance, tax and maintenance all thrown into one simple payment for ease of appeal. It will be seen as a normal daily living expense just like a utility bill.

kippy

ToxicPaddy wrote: »

The motor industry like any other industry has moved to a more disposable format. In a few years the chances of actually being able to do major repairs or upgrades on cars will be so financial unappealing that most people will go buy a new or nearly new car instead.

It will be like home appliances, designed to last x no of years and then we buy a new one. No point repairing it as either you cant get those parts or it's so expensive to do, it's better to buy a new one

The offer of cheap credit, ease of applying and everything being pretty much instant could see whole packages being offered by dealerships where you buy a car, get insurance, tax and maintenance all thrown into one simple payment for ease of appeal. It will be seen as a normal daily living expense just like a utility bill.

That might be the way it HAS been going however it's likely the focus on Climate and Weather may have an impact on that model.

ToxicPaddy

kippy wrote: »

That might be the way it HAS been going however it's likely the focus on Climate and Weather may have an impact on that model.

Absolutely. They will have to change their model to meet this challenge.

However companies like VW already recycle older cars to reuse the materials for new cars.

So they could use the argument that they already recycle this being more environmentally friendly and by forcing people to purchase new cars more regularly that these newer models are more efficient, use less fuel or are electric thus getting petrol and diesel older models off the road.

Not necessarily true but most governments will back these companies as they are huge employers both directly and indirectly, plus so many people rely on cars it's going to be very difficult to get people to change and unfortunately convenience seems more important to more people than the environment.

It's unfortunate and I can't really see that changing in our lifetime

Wibbs

kippy wrote: »

That might be the way it HAS been going however it's likely the focus on Climate and Weather may have an impact on that model.

Yup K and it bloody well needs to as for all this talk of climate change and oddball Swedish teens screeching maniacally about it we consume more than we did even twenty years ago and far more than our great grandparents did. But our economies and what we think is our personal well being has become so tied into the current consumption model it's going to be a bloody hard sell. I can't see it happening for quite a while K. I really can't. Oh we'll throw fripperies at it feeling like we're doing something to assuage our guilt and think paper bags, leccy cars and turning down the heat in our houses by one degree will save us, but they won't to nearly the degree required. It's a few drops in the ocean.

The_Honeybadger

kippy wrote: »

That might be the way it HAS been going however it's likely the focus on Climate and Weather may have an impact on that model.

Without a doubt. I think more and more pressure will come on all manufacturers, be they motor, appliance etc to maximise resource efficiency in the future. We are already seeing a shift in consumer behaviour in relation to plastic and it will eventually shift to other areas where there is excessive consumerism and waste. Scrapping a perfectly good car for economic reasons is crazy.

weldoninhio

joejoggs wrote: »

How much in debt are you and your current income. Would be interesting to see. Not taking mortgages into account.

About 10k or so debt. My income is my own business. Zero savings though, you can't take it with you.

James Bond Junior

A very interesting thread, I can identify with so many stories. I was a total spender in my early 20s until a switch went off in my head at around 25 as I was sick of living in a houseshare. I sat down and detailed all my outgoings to the euro and started to budget everything based on what came in, what HAD to go out, savings and what I have left over and lived my life around those figures. Sold the nice newish BMW in 2013, cleared the loan and bought a Focus for a grand which I drove for the next 2 years. I took on extra work as well saving my arse off to gather a deposit. House was bought when they were at their cheapest in 2015 which is now rented with a healthy return. I bought keeping in mind to hold on to it as rental long term/pension pot and chose an area with very strong rental demand. Mortgaged obviously but I chopped and changed the bank and shaved a few years off easily enough as well as paying a fixed overpayment and availed of the cheapest rates. Good timing means now the LTV is sub 60% meaning it will be paid off early. Renovations were done on a CU loan as we didn't want to be paying a new kitchen etc off over 25 years but that was cleared this year in full. Times were tight beginning in the new house but it was worth it now.

We had a PCP car which we paid the balloon out of savings as well as two more cars, a banger I bought for cash to drive into the ground and a classic which I enjoy throwing money needlessly at. We had to buy a car in our new country last month which was easier to pay for via finance than transferring cash from Ireland but it will be paid off next payday in full all going to plan. The PCP car is sitting up at home but we figure we will keep it, paying off the GMFV actually saved a fortune and erased any depreciation for a year or 2. I will keep it until it isn't financially viable to drive anymore either way I reckon.

We fairly raided our savings setting up here but we bought with the mind of shipping the furniture and bits home or selling them to other expats so it isn't the end of the world. Our jobs provide an end of contract shipping allowance which will cover a container should we wish. Earning a lot more than at home and I have been promoted this week into the highest level of
senior management and wife into another senior managment role so income will increase after Christmas and low living expenses plus zero debt mean we can save hard yet still enjoy life. I work with her and will be her boss soon which could be interesting!

Life is great, thank God. We've made sacrifices to be in this position that weren't always easy but coupled with damn good luck it has been more than worth it. I'd advise anyone to look into expat life, if you have a transferable skill in demand elsewhere in the world, jump at it, especially if you have debt to clear or want to increase savings.

anewme

HappyAsLarE wrote: »

Why would anyone sign a mortgage contract they don’t understand?

I have saved €150k by paying mine off early.

I was one of those who said I would not pay off mortgage early.

Just tidying away paperwork there and a mortgage statement caught my eye.

In total I've paid just over 400 euro mortgage interest in 2018. Got about 30 euro back in mortgage interest relief. Haven't got 2019 statement yet, but will be less. Theres no way I'll be paying that off early.

Jenneke87

I owe my parents 1500 euro which I will paid them in full next year. Also around 7000 euro's in college fees and hope to get that cleared in the next few years. Other than that, I have no debts.

I learned to safe the hard way. I was unemployed when I came out of college and stayed so for nearly two years. I was living with my sister at the time and because of that, wasn't entitled to any form of welfare, the employees response was that since I was living with my sister it was up to her to support me, even though she was working as a waitress and is one year younger. It was horrible. I appealed their decision and after 6 months they admitted that they were wrong. If it weren't for my parents giving me a 100 euro per month for food, I don't know how this would have ended. Now, I make sure I have healthy savings so in case something happens, I have something to fall back on.

lisasimpson

People view debt differently. Some people borrow borrow borrow and will pay something. For me debt doesnt sit wellm borrowed for my 1st 2 cars. Used saving for the 3rd. Never buy a span new car . They are generally about 3 years old woth low mileage.
Not on a tracker and crap interest on savings .Currently trying to get himself around the idea of paying a bit extra of the mortgage when we can.otherwise will be still be paying it when the college expenses hit in.

Lia_lia

No debt here. I took out a credit union loan for a car once as I was told it was good to take out a loan for your credit rating (?!). Paid it off in a couple of months as I had the money.

I’ve been lucky as I’ve always had a job and went into an ok paid job from college. My rent has also always been quite reasonable. Bit of my own doing too as I save quite a lot and don’t spend money on silly things. My car is 15 years old and I’ve no intention on buying another one till this one stops working. Saying that I had a baby this year and will be buying a house next year so it’s probably downhill from here money-wise!

jk23

About 25,000 left on a credit union loan I used to upgrade a place near my parents. I have an OK job

I am still worried if I lose my job how i could manage. My repayments are 105 a week

fergus1001

450 on a credit card and an overdraft of 1100 which I will be clearing over the next few months when I Finnish paying for my car next month (500 surplus a month from then on)

I'm on 31500 and rising plus expenses

howamidifferent

Outside of mortgage I'm carrying €44.5k unsecured debt arising from many bad decisions over the past 10 years. Currently working to pay it off over the next 5 years. Income approx €81k.