Your net worth...

[the_lone_wolf]

http://www.wrongwaycomics.com/comics/WW00048.gif

:-k

[BigBaddad]

Excellent, I think all the figures might be on the low side.

[EssexDave]

Heard somewhere the average unsecured debt in UK is around 30k?

[thedonal]

That's f**king brilliant!

Though it doesn't take assets into account, I doubt that these would cover it in some cases!

[the_lone_wolf]

Heard somewhere the average unsecured debt in UK is around 30k?

Supposedly £8,761 per household (http://www.creditaction.org.uk/debt-statistics.html), still double the European average and quite frightening when you consider there will be a significant number of households who don't have debts though...

[the_lone_wolf]

Though it doesn't take assets into account, I doubt that these would cover it in some cases!

I'd wager the majority of cases

For an asset to cover it's debt to you, including interest, it'd have to be worth more than it cost you at the point at which you bought it. Short of inheriting something you'll have paid for it at some point, and if you borrowed to do so it's extremely unlikely to be able to pay off that borrowed money should you need to sell it...:(

[EssexDave]

I'd wager the majority of cases

For an asset to cover it's debt to you, including interest, it'd have to be worth more than it cost you at the point at which you bought it. Short of inheriting something you'll have paid for it at some point, and if you borrowed to do so it's extremely unlikely to be able to pay off that borrowed money should you need to sell it...:(


Not entirely true.

If you purchase a motorbike for £10,000 and put a £5,000 deposit down for example, a part exchange and some cash. You get finance for the remaining 5k.

Obviously depending on the depreciation, but at the time you purchase it, and presumably for quite a while it will be worth more than you owe on it.

[timwilky]

Eh, I must be the exception to the rule

Own my house, no credit card, no bank loans, money in the building society, own my bike.

Guess my credit rating must be low. Or is that the side effect of growing up in a time of if you cannot afford, you cannot have

[L3nny]

Eh, I must be the exception to the rule

Own my house, no credit card, no bank loans, money in the building society, own my bike.

Guess my credit rating must be low. Or is that the side effect of growing up in a time of if you cannot afford, you cannot have

Probably more like growing up in a time when houses were reasonably priced in relation to the average earning.

I have had always thought the same when I see a beggar on the street, especially as most of them go home to their benefit funded houses at night.

[Sid Squid]

Or is that the side effect of growing up in a time of if you cannot afford, you cannot have
I think it probably is, some people I know have debts that just the thought of is enough to keep me awake at night. They however consider this to be entirely normal and that I don't have significant debt to be unusual. I have credit cards though not for borrowing as such, just for convenience.
I find some people's level of debt simply scary - it seems those like you and I are the odd ones out nowadays.

[Bluefish]

Supposedly £8,761 per household (http://www.creditaction.org.uk/debt-statistics.html),


I wish it was :(

[MrTom]

I'm on -£100k, I'm 24, and I don't even have a house to show for it. Well you can't take money with you to the other side so you might as well spend it all while you can.

[CoolGirl]

I think it probably is, some people I know have debts that just the thought of is enough to keep me awake at night. They however consider this to be entirely normal and that I don't have significant debt to be unusual. I have credit cards though not for borrowing as such, just for convenience.
I find some people's level of debt simply scary - it seems those like you and I are the odd ones out nowadays.

<puts hand up>
Me! I don't buy what I can't afford = no debts, money in the bank, cards which get paid off each month, and my commitments (ie mortgage) are well within the realms of affordability. And I work hard for my income - I do not expect my employer to owe me a living.

I do get more than a little bit hacked off with people who moan about not being able to afford the deposit for a property, and yet build up frightening debts so they can have all the lastest gadgets (which get replaced long before they've worn out), plenty of holidays, nights out, new clobber etc. Do they think they'll never have to pay it back?:confused:
Questioned, said same folk do not see the connection between their borrowing habits and the national debt. It's someone else's fault/problem.

[wyrdness]

And me. I hate debt. I pay my credit card bill off each month. I don't borrow money for vehicles, holidays or anything else. The only debt I have is my mortgage and I hate having one of those too. Having said that, the only reason I took out the mortgage was to buy a second home once I'd paid off the mortgage on the first.

[G]

Ha that's good. If I don't have cold hard cash i don't spend it.

There's a chap at my work who lives in his £2500 overdraft not including all his credit cards. He's up to his eyeballs, fully admits it too. He just gone away for a fortnight as 'he has not been away this year yet' :rolleyes:

[Red Herring]

I think it's hard when you're young to get on the ladder without incurring some debt, but it should be kept in perspective. i think the issue today is the reasons people are prepared to get into debt seem more fickle than they used to be, ie: they want a holiday, a new TV etc etc. My wife and i started out together when we were both 19 and we had to have a mortgage to buy our first house, and I remember having a bank loan to buy my first car, but other than that we borrowed very rarely. The other issue of course these days is the readiness with which people start over again. A colleague of mine at work is due to retire in a couple of years (aged 52) but three years ago he remarried, took out a 25 year mortgage and they've now got two kids together. Sooner him than me!

[fenjer]

I own my car and my bike outright, I rent my house. I dont have any credit cards. I hate being in my £100 overdraft with a passion.

If I cant afford it I cant have it. Simple. Yes that means I miss out on holidays, and my car is 9 year old and not new, my bike even older, but so what. They are mine. No one is about to knock on my door and take them away.

[speedplay]

Just the mortgage here for me and hoping that will be paid off shortly (if all goes well) too:)

[Dicky Ticker]

Perhaps as Timbo says,It was growing up in a time when if you didn't have money you didn't have it. Many things have changed since then and credit is so very accessible some people tend to get carried away in the good times.
One comment I slightly disagree with is the cheap housing,in relation to earnings things haven't changed that much,my first house was four times my salary in 1969 and that is comparable to the same house/salary today.Life can mean being a bit prudent with your finances and prioritising purchases to get what you want,instead of squandering your money on new luxury items,but making do with what you have.

[embee]

A few years ago I applied for a credit card and was declined, I was a bit concerned something was amiss so checked with Experian.

When the report came back, there was the problem: - no rating, no debt, no credit history. Sorry, if you can't show you know what debt is all about you're not having a credit card from us.

[ThEGr33k]

I have no debt, no overdraft and no credit card. Only time im likely to go into debt is if/when I buy an house...

To MrTom, what the hell have you fritted 100K away on?

[L3nny]

I spent my 20s enjoying myself, went on 3-4 holidays a year, drove nice cars, went out every weekend and a couple of times in the week. I spent a lot of money on enjoying myself, maybe a bit too much, racked up a few grand on credit cards etc. Now I am older and all my mates are married and have kids I stay in a lot more and am starting to pay it off.

Do I regret making the most of my youth? Do I balls.

You can't take it with you, enjoy yourself while you can, it's only money, it's no fun sat looking at your bank statement.

[jamesterror]

I'm only 18, nearly 19 and buying a house, well it isn't going to happen for a while as I'm a student, however I live at home so still have my loans and tuition fees..

My parents don't give me a penny as I work, they don't charge me board as long as I do my fair share round the house, the rule of; if you can't afford it don't buy it is highly emphasised in my household as our house is continually a work in progress, such as the bathroom has just a shower and a bath, no flooring, toilet, sink etc because my folks believe that its better to have the money in their account rather than lend it or bang it on the mortgage.

Ever since I turned 18 and have had more freedom to do what I want independantly most months my bank account has gone down to £50 enjoying myself, going out, going round the country, snowboarding and now going abroad twice more this year.

I wish I'd stayed at uni the first year, although I'd have racked up probably a bit more debt it'd have made up for it in fun, however the commuting will have to carry on and although its the boring option, I stand more chance of a house after or to move abroad after uni..

[Bibio]

I'm on -£100k, I'm 24, and I don't even have a house to show for it. Well you can't take money with you to the other side so you might as well spend it all while you can.

are you a compulsive shopper... jezuz m8 thats scarrrrrrrrrrrrrrrry.

[Bibio]

our house is continually a work in progress, such as the bathroom has just a shower and a bath, no flooring, toilet, sink etc because my folks believe that its better to have the money in their account rather than lend it or bang it on the mortgage.

and here was me thinking i was the only one :smt040 i'm not quite as bad as your parents though :rolleyes: but very close :takeabow:

[EssexDave]

Biggest debt for age I've seen was £300k at 22. Guy had tried to setup several companies and borrowed heavily personally to do this.

I think at the minute, and perhaps more so a couple of years ago. The problem was the ease at which people could obtain credit.

At 18 and whilst unemployed I had a credit card approved from Halifax (and hey ho they were one of the banks in difficulty)

At 19, I get a Natwest credit card with a 4k limit whilst employed with RBS group for 5 months on about 16k pa.

I then get accepted for a capital one card with 1.6k limit and halifax at this sort of time, increase my limit to 2.5k from 1100.

I do not have an especially good credit rating, I do not utilised my credit cards a great deal. The natwest card was a balance transfer and the capital one card has my bike insurance on as it's 0% promotion. (so cheaply to pay monthly)

I was also offered a loan by the halifax (as I recently cancelled my credit card when they tried to up apr from 15.9-24.9% apr) £10,000 at 33% apr (oh yeah sounds brilliant)

It's easy to accept a lot of credit and banks have tended to pile it on. It obviously, is a choice whether you use it or not. However, the problem is a lot of people assume it'll work out in the end, or they can borrow more to pay for their credit.

I don't have a huge amount, but I am looking forward to being debt free, at which time it will be a case of save and pay for it and no more debt.

[MrTom]

To MrTom, what the hell have you fritted 100K away on?

Ah just the usual, hookers, fast cars etc.!

No really its debts from doing a masters plus the cost of training to be a pilot. I'm very fortunate in that a large sum of the loan is interest free, and if the airline who is supporting me through training does give me a job then I'll be let off another fair chunk for staying with them 3 years, which I will! However, as it stands now I am committed to be £100k down.

I must add that I agree with all the comments about not spending what you don't have. I've never had a credit card, and I've never borrowed to buy luxuries. I see my debts purely as investment, hopefully I'll be able to pay them off!

[Neeja]

I've just turned 24, my total debt is £1700, and I'm hoping to have that cleared by September. Had a rough few years since I moved out from my parents at 21, but I've never been more than £6k in debt. I've had no holidays away (apart from weekend breaks in the UK staying with friends), haven't been out drinking more than once or twice per month, and haven't bought anything stupidly expensive except for my new Macbook. I don't understand how people get into massive debt, tbh - if I'd spent less money on petrol and bikes (the SV cost me about £4k in replacement parts and improvements), I could've had three nice holidays or a lot of nights out drinking and still been in the same situation...

[ThEGr33k]

Ah, well that sounds fair Mrtom. Way you said it, it was like you just shoved it down the toilet :p

[MrTom]

It's just what I have to tell myself to be able to sleep at night.

[EssexDave]

Generally, educational debt is worthwhile. Generally leads to either a better paid job or better job satisfaction which let's me honest, are two things then generally drive people in their day today lives.

Lucky if the two can be satisfied together (As I hope they can with my chosen career) but each to their own.

One problem is a lot of people who go to uni, get plastered all the time and only went to uni because they didn't know what they want to do or just for the experiance. Whilst I'm not saying it's a mistake to go to uni if you don't know what you want as a career, because I think quite the opposite, but I think a lot of people get in a lot of debt with student overdrafts loans etc and it never really helps them.

Just as a side, a student loan is not included in a bankruptcy.

[L3nny]

I can sleep at night because I used my credit card to buy a really comfy bed.

[timwilky]

I cringe at student debt, probably because I was the recipient of a full grant and company sponsorship, from a time when the state valued an educated workforce and was prepared to invest in it.

These days it would appear that the state uses higher education as a method of delaying the inevitable and a couple of million school leavers knocking on the door of the labour exchange to sign on the unemployment register.

I was out last night for an extended family meal, my nephew who will go to university in September was sat next to me.

Even though he is going to the local university and living at home he intends to take his full loan, to fund his holiday. His only expense is his drinking/womanising/car and he already has a part time job to fund those. I therefore cannot understand why he is so keen to take on the debt when he can live without it.

[Sean_C]

I cringe at student debt, probably because I was the recipient of a full grant and company sponsorship, from a time when the state valued an educated workforce and was prepared to invest in it.

These days it would appear that the state uses higher education as a method of delaying the inevitable and a couple of million school leavers knocking on the door of the labour exchange to sign on the unemployment register.

I was out last night for an extended family meal, my nephew who will go to university in September was sat next to me.

Even though he is going to the local university and living at home he intends to take his full loan, to fund his holiday. His only expense is his drinking/womanising/car and he already has a part time job to fund those. I therefore cannot understand why he is so keen to take on the debt when he can live without it.


Perhaps I'll be taking a similar path to you, from what I've read. The place I work for is going to put me through a degree after my apprenticeship.

I've also been brought up so that I only buy things if I have the money- I wouldn't want it any other way. I've got 10 grands worth of musical instruments under my bed all bought and paid for by my own earnings. Same with my car and bike.

Strange though that with the exact same upbringing, my younger sister (who earns a lot more than me) hasn't taken a blind bit of notice and has just bought a 500 quid car by getting an overdraft.

[metalmonkey]

I do find it funny that I'm worth more dead than alive. But I have very little debt and when I do use my credit card the interest on the balance is less 1% a month. The student is a pain, but at %0 right now but 9% of what I take home is not a small amount!

I would have probally been a lot better off had I not have spent time working in the US and travelling, however I suspect life would have been far more dull had I stayed in the UK and worked.

[454697819]

I See there are two types of dept,

recoverable, i.e car or bike where providing it is suitably insured and you haven't stretched the payments to the extremes, if you need to you can dispose of these assets on borrowed money and pay off the debt, typically within reason i.e a coupla hundred pounds or so.

Unrecoverable - Holidays, meals out, drinks, clothes etc etc, the "stuff" you dont need and cant sell on to pay of the debt.

I used debt to bring forward things in life, i.e cars and bikes etc, the mortgage is just that, id be paying it in rent if not to a bank. But all my debt is recoverable wherever possible. I hate loans but they serve a purpose but will only get one if I know I can afford it and it suits my lifestyle at this moment and the foreseeable time for the loan.

[metalangel]

Only debt I have is the mortgage, everything else like credit cards and such I pay off immediately. All my cars and bikes I've bought in full.

She on the other hand seems to have always been living just on the edge of going into her overdraft, I don't know wtf she spends it on.

[TazDaz]

Ah just the usual, hookers, fast cars etc.!

No really its debts from doing a masters plus the cost of training to be a pilot. I'm very fortunate in that a large sum of the loan is interest free, and if the airline who is supporting me through training does give me a job then I'll be let off another fair chunk for staying with them 3 years, which I will! However, as it stands now I am committed to be £100k down.

I must add that I agree with all the comments about not spending what you don't have. I've never had a credit card, and I've never borrowed to buy luxuries. I see my debts purely as investment, hopefully I'll be able to pay them off!

Doing a masters doesn't really amount to that much money though...unless you've been living the life of Walter Mitty whilst doing it!

Take it you're not looking at getting a mortgage anytime soon then....-£100k already...good luck! :)

[Stu]

I See there are two types of dept,

recoverable, i.e car or bike where providing it is suitably insured and you haven't stretched the payments to the extremes, if you need to you can dispose of these assets on borrowed money and pay off the debt, typically within reason i.e a coupla hundred pounds or so.

Unrecoverable - Holidays, meals out, drinks, clothes etc etc, the "stuff" you dont need and cant sell on to pay of the debt.

I used debt to bring forward things in life, i.e cars and bikes etc, the mortgage is just that, id be paying it in rent if not to a bank. But all my debt is recoverable wherever possible. I hate loans but they serve a purpose but will only get one if I know I can afford it and it suits my lifestyle at this moment and the foreseeable time for the loan.
A bit simplistic.
Where does educational debt fall? You can't sell it to pay off the loan, but has been argued above it's very worthwhile to improve your financial prospects in life.
Also what about getting a car with a loan, but you end up selling the car without paying off the loan.

[yorkie_chris]

recoverable, i.e car or bike where providing it is suitably insured and you haven't stretched the payments to the extremes, if you need to you can dispose of these assets on borrowed money and pay off the debt, typically within reason i.e a coupla hundred pounds or so.

Hardly, imagine a new car, 10k finance which is worth 8k the second you sign the dotted line.

[Dave20046]

Doing a masters doesn't really amount to that much money though...unless you've been living the life of Walter Mitty whilst doing it!

Take it you're not looking at getting a mortgage anytime soon then....-£100k already...good luck! :)

My uncle took a year out to do his masters, quit a good job and did it. Paid for itself within a couple of years. I wouldn't do it for the sake of it though (as with any education really...or anything for that matter)

[Specialone]

I personally have no issues with having finance or debt if its something you can afford to pay and want.
I have just partly bought my new trumpet on finance, i could have scraped together the cash but would have left my account too low so wouldnt have any emergency money.
If i saved for everything i would never have anything, im a live for today person, dont put things that you really wanna do or buy, cos you may not be around tomorrow.
I know of several people who saved like crazy for retirment then died with 1-2 years of retiring.
Having said all this, spend within your means as uncontrollable debt can make your life very unhappy.

Phil

[454697819]

A bit simplistic.
Where does educational debt fall? You can't sell it to pay off the loan, but has been argued above it's very worthwhile to improve your financial prospects in life.
Also what about getting a car with a loan, but you end up selling the car without paying off the loan.

correct it is simplistic,

but that would fall somewhere in the middle, however as I don't have educational loans because I am not edumacated I haven't needed to categorise it.

dont forget to KISS. :p

As for buying a car with a loan, selling it and not paying it back, that converts that money to non recoverable debt.. and so is something I try to keep to a minimum, so I wouldn't do that :-)

see its nice and straight forward in my head!

[454697819]

Hardly, imagine a new car, 10k finance which is worth 8k the second you sign the dotted line.

always exceptions to the rulse mr YC, which is why you wouldnt find me buying a new car, see if it dont fit roughly within my rules.. I..(note me, only me just me no one else has to use them) I dont buy it on finance..

[suzsv650]

Hardly, imagine a new car, 10k finance which is worth 8k the second you sign the dotted line.

Gotta be quite stupid to buy new imho, i think hes more on about second hand cars where your likly to make most of your money back..

[Triv650]

Eh, I must be the exception to the rule

Own my house, no credit card, no bank loans, money in the building society, own my bike.

Guess my credit rating must be low. Or is that the side effect of growing up in a time of if you cannot afford, you cannot have

You should definitely get a credit card as otherwise you won't properly develop a good credit rating, which if attained is better than no credit rating.

I'm almost at Uni so will be in debt shortly no doubt. Not gonna be a great feeling I'll be honest but just one of those things you have to do. I don't own a credit card yet however, so I think I'll just get one and not use it too much :D

[yorkie_chris]

Is it just me who couldn't give the shortest sh*te about a credit rating? I don't want to borrow any money...

And to say there is such a thing as a "proper" credit rating is implying to me that purchasing what I can afford is somehow "improper"? "Develop" a credit rating, it's mental consumerism for stupid people, "development" is when your b0llocks drop.

[L3nny]

Is it just me who couldn't give the shortest sh*te about a credit rating? I don't want to borrow any money...

And to say there is such a thing as a "proper" credit rating is implying to me that purchasing what I can afford is somehow "improper"? "Develop" a credit rating, it's mental consumerism for stupid people, "development" is when your b0llocks drop.

I know it's a load of balls but you have to play the game the way they want. Especially if you get a mortgage.

It's not that they wont lend you money, it's just that they will charge you more for the privelage.They think you will struggle to make the repayments so they make them even higher so it's harder for you to repay.

[Quedos]

Its amazing what your credit rating affect though - i'm still battling with companies who have my address balcklisted because of previous owners. they keep saying its my credit rating - which is high ( well was a couple of missed payments and its dropped slightly)
I hav £1.5 student loan and the mortagage. One credit card - which is cleared everytime i use it - once every few months just so I can keep it the credit rating up. Just in case as you never know when you may need a finance deal.

[squirrel_hunter]

Is it just me who couldn't give the shortest sh*te about a credit rating? I don't want to borrow any money...

At the moment.

Think about the future. Are you going to buy a house? Do you intend on saving the entire amount before buying it or will you be wanting a Mortgage?

The most acceptable debt in this country is a mortgage. But for a bank to lend they should see you as an acceptable risk based on your previous performance. My Sister struggled to get a mortgage a few years back in the 'good o'll times' of lending because she had never had debt before even though she and her partner had a good deposit saved.

Think about it this way: A new mate of yours ask to borrow £100. Sense dictates the answer is no. But what if he asked for £5 when you're out on the bikes to pay for lunch as hes got no cash? Sure. He then pays it back the next time you see him. Few months later £20 for petrol, paid back a week later. After months of knowing him and having lent him a few quid which he's paid back with no problems he asks to borrow £100? Well you've lent him money before and hes paid you back, you've known him for longer. Doesn't seam as much of a risk now does it?

[Specialone]

Unless you earn 2-3 times the average salary or was born into money its hard to live a 'normal' life without some kind of credit, its normal, i dont see what all the fuss is about tbh.
I just hope all you people who save fior the big purchases dont die before you get to your targets.

[timwilky]

When my son started to shop round for a mortgage some told him to get a credit card as that would boost his credit rating. I fail to see how evidence of debt management would be superior to evidence of good financial management by not having overdrafts, money in your saving accounts etc.

Granted his mortgage company did play silly beggars withdrawing his mortgage offer 2 days before completion as they had decided to scrap the product he was using. They accused him of falsely completing the application and failing a credit check.

When he asked where, they say you failed to disclose your middle name, when we did a credit check it was established that the mortgage company had checked in both forms of his name when he made the application. they had been given a copy of his passort that carried the middle name etc. The credit checks were all good. They simply wanted to pull the mortgage product, he asked their appeal process and 8 days later the mortgage was restored. But it cost him a fortune for failing to complete after signing the contract that he had to fund himself.

So my view is credit status is useless, a financial institution will use it as an excuse, but if they do not want to lend you money, they don't have to. And they will try dirty tricks if they think they can get away with it.

[454697819]

When my son started to shop round for a mortgage some told him to get a credit card as that would boost his credit rating. I fail to see how evidence of debt management would be superior to evidence of good financial management by not having overdrafts, money in your saving accounts etc.

Granted his mortgage company did play silly beggars withdrawing his mortgage offer 2 days before completion as they had decided to scrap the product he was using. They accused him of falsely completing the application and failing a credit check.

When he asked where, they say you failed to disclose your middle name, when we did a credit check it was established that the mortgage company had checked in both forms of his name when he made the application. they had been given a copy of his passort that carried the middle name etc. The credit checks were all good. They simply wanted to pull the mortgage product, he asked their appeal process and 8 days later the mortgage was restored. But it cost him a fortune for failing to complete after signing the contract that he had to fund himself.

So my view is credit status is useless, a financial institution will use it as an excuse, but if they do not want to lend you money, they don't have to. And they will try dirty tricks if they think they can get away with it.


Bit of a generalisation, that is one bank doing one dirty trick, sure they are full of them everywhere but most financial institutions I deal with are actually half decent and see the sense in most things,

the credit status and score is there to give those who dont know you an idea of your ability to pay back money, which is why your regular bank will almost always give you a loan without so much as blinking, where as others to full credit checks etc.

I like to check my rating because I never know when I will need credit and when i do need it I prefer to borrow at the lowest rate possible this is achieved by having a good credit rating.

[muffles]

Mortgage aside I'm in the black :)

Have a credit card, do use it, but not that regularly. I am lucky enough to earn a decent amount so tbh anything that I need to borrow for, it wouldn't be on a credit card, it would have to be a personal loan of some kind. Anything below that I can fund from my earnings or savings.

[squirrel_hunter]

I fail to see how evidence of debt management would be superior to evidence of good financial management by not having overdrafts, money in your saving accounts etc.

Its proving that you are a known risk. If you have never been lent money before how does the bank know you can be trusted to repay it? Yes you can spend years not borrowing money showing that you can manage what you have, but that does not demonstrate that you will pay back what has been lent to you, only that so far you haven't wanted to borrow any money.

Take my example below of how the banks will look at someone without a credit history:

A new mate of yours ask to borrow £100. Sense dictates the answer is no.

But what if he asked for £5 when you're out on the bikes to pay for lunch as hes got no cash? Sure. He then pays it back the next time you see him.

Few months later £20 for petrol, paid back a week later. After months of knowing him and having lent him a few quid which he's paid back with no problems he asks to borrow £100? Well you've lent him money before and hes paid you back, you've known him for longer.

Doesn't seam as much of a risk now does it?