Are you in major debt? Do you know people who are?

[Sly21C]

Obviously this is a very sensitive question and I'm taking a chance posing it as I might not even get one reply.

The question is are you in a lot of debt? If so, how did you get yourself into your current situation? Do you perhaps know someone close to you that is in a lot of debt and is finding it hard to cope?

I'm not in debt. That's only because I am single, I have no kids, I rent a very cheap flat and drive a dirt cheap car. I know a few people who are in debt. I try advice to be frugal with their hard earned money but their responses range from life being too short and must be enjoyed to mind my own business. I know a guy who resigned from one company to another, cashed out his pension from his old company and bought a new car with it.

I ask because I read articles almost on a weekly basis about consumers who are in debt, consumers who take up unsecured credit loans to pay for day to day expenses, even food. This is a worrying trend and has most sectors of society biting their nails.

 

[AlmightyBender]

All points have been discussed extensively on the forums already

 

[Carol35]

Yep, we are!! It can be overwhelming sometimes but I know we did it for the right reasons. 2 huge personal loans and 2 x credit cards bought us a house and a car. We are working slowly through it and know that in 5 years time, we look back on this and (hopefully) laugh! But it was now or never so we just jumped in. However, we are not starving, we have our own home and somehow, we manage every month! I feel worse for the kids when they want something, like an outing to spur or whatever, most of the time I've got to say no because we cant afford it...but I always add one day they will thank me!

We have 2x clothing accounts that are only used in extreme emergencies( normally school related stuff), currently both are almost paid up.

It sucks for now, but will pass!

 

[satanboy]

Depends what you see as "debt". A home loan can be seen as debt, but the property could be worth 300% of the loan.

 

[Carol35]

Depends what you see as "debt". A home loan can be seen as debt, but the property could be worth 300% of the loan.

Yep, that's why I see our debt as "good" debt although the high interest rates on loans and CC just pee's me off, nevermind all the admin fees and unnecessary credit insurance we are forced to take.

 

[STS]

Yep, in way over my credit card, on my limit on my overdraft and paying off a loan. A divorce, broken car and getting sick will do that to you

 

[VG008]

Debt is your friend, learn to embrace it

Nope, I'm not in debt. I'm in the same position as you - single etc.

I know a guy who brought a new car, had store accounts etc and eventually his entire salary was going to paying of these debts and had no extra cash.
He eventually paid off the store accounts with bonuses and increases. However, because the car payments are so much he can't save enough for a home or travel. He is financial life is on hold until he pays off the car (60 Month - very very long time to wait).

I've notice that many people out of varsity with good jobs & pay would rather buy a fancy car than save for a home or invest. Your success is some what judged by the car you drive.

 

[Carol35]

Yep, in way over my credit card, on my limit on my overdraft and paying off a loan. A divorce, broken car and getting sick will do that to you

Haha, now I don't feel so alone!! Nothing beats standing at the shop in the last week of the month trying to buy a few things and cards get declined..." Try this one, oh ok, now try this one etc etc" hoping one will go through!

 

[biometrics]

60 Month - very very long time to wait

:erm:

 

[hellfire]

Yep, that's why I see our debt as "good" debt although the high interest rates on loans and CC just pee's me off, nevermind all the admin fees and unnecessary credit insurance we are forced to take.

While a grudge purchase, credit insurance is far from unnecessary.
Many cover your installments if you're retrenched, and if you die, your debt will be paid off so your family are not burdened

 

[MKFrost]

No debt, no accounts, 2 x two year old vehicles paid for, 2 x houses paid for, aged 43 and semi retired, wife working 3 days a week part time.

Eleven years back was up to my eyeballs in debt. Sold everything, house, cars, furniture etc.. Paid off 80% of our debt and literally walked away with only the shirts on our back. Bought a dilapidated 1300 Toyota, from a family member, as our only means of transport (was driving a ML & SLK before that) and rented a place until all debt was paid off. Sat down as a family decided how we needed to get our lives back on track and made it a team effort to get our lives back on track.

Worked wicked hours for a very long time, did plenty of extras over weekends when friends were playing golf etc.. and made lots of other sacrifices, so much so that I sometimes hated myself for not having a life but the decision was to focus on the future and not the 'now'.

Managed to accumulate a small fortune over time, as there was no longer any real expenses and debt to cover. Made the savings work harder than I did and now its hard to believe where we were when we look back.

I see what we went through every single day everywhere around me. People will live off bread and water, just as long as that BMW is in the driveway. Sometimes a person needs to go through this to learn the true value of money, unfortunately very few will.

 

[ponder]

Never been in debt but everybody I knew that was in debt were basically living beyond their means. If you cannot pay for something with cash then you do not buy it (with the exception of property, if it's a car you make sure you pay it off in 12-24 months).

Lot's of people see others livin it up la vida loca but what they don't realise is that those people are probably in debt. It's not a lifestyle to imitate. There are plenty of rich people out there driving toyotas & corsa bakkies that don't have the latests toys and crap but they have like 10 revenue earning properties and other investments generating money for them.

Money is something that has to work for you and occasionally you treat yourself.

 

[ponder]

I see what we went through every single day everywhere around me. People will live off bread and water, just as long as that BMW is in the driveway. Sometimes a person needs to go through this to learn the true value of money, unfortunately very few will.

+1

 

[Celine]

never have had debt, except if you want to call water and lights a debt. i think i'm OCD with owing anyone anything more than i have to. when i had a bond i paid it off within 4 years. i am now needing to take out a 300 thousand bond and i'm already making plans to pay it off. i haven't even got the bond yet but i'm OCD already. i pay cash for everything, if i don't have the money i do without.

 

[M3mPh1z]

I am constantly on an up and down spiral.

Frugality being the goal but temptations taking over being my biggest problem.

I am a motor head, I love cars and see it as my true passion in life, or at least that is how I sell it to myself that I need a new car. Yet the future thinking me who is luckily more predominant is driving a standard 16 year old car that gets me where I need to go.

I have been 95% of the way mentally there to buying a new out of my means expensive to maintain sports car, instead I have decided to rather save the thousands a month I would have been pumping into its repayments.

At this point in my life I am currently debt free with minimum expenses staying with my soon to be fiance (who has a small amount of credit card debt which will be settled next week). We used to be impulse buyers but luckily local discussion regarding the matter has cured us of that.

I also found setting, short, medium and long term (realistic) goals helps a lot when deciding on day to day spending

 

[Icarium]

No debt other than a home lona that I hope to pay off in about 3 years. I do have a CC with a low limit which hasn't seen any use in a while and gets paid off at the end of the month if it does, and an overdraft which is used for emergencies only.

I have one good friend that has to juggle repayments just to keep his creditors off his back. Another is actually in the process of applying for sequestration since she can't afford even the reduced installments on her debt that were arranged under debt review. And a close family member has unsecured debt that pretty much matches what I still owe on my bond, but he and his partner have moved into a cheaper place and started taking other steps to get his debt under control.

On the flip side my gf has just paid off her car that she bought new last year and is completely debt free (although that's primarily because she still lives with her folks).

 

[Cius]

No debt other than homeloan and the outstanding balance on my HL is about 50% of the value of the property after 2.5 years of living there. Will hopefully clear it well before the 20 year period of the loan. I hate debt and view it as something to be avoided at all costs and eliminated ASAP if you have it. I don't own a credit card and doubt I ever will.

 

[DrewChan]

abooout 23k in debt - majority being a maxed out overdraft - although this is down from close to 100k in debt due to stupid choices when purchasing cars 3 years ago.

Make it easily through the month with money to spare - unless I buy myself a new toy - like my guitar. In which case I delay it slightly.

Taught me a lot about money management

 

[Carol35]

never have had debt, except if you want to call water and lights a debt. i think i'm OCD with owing anyone anything more than i have to. when i had a bond i paid it off within 4 years. i am now needing to take out a 300 thousand bond and i'm already making plans to pay it off. i haven't even got the bond yet but i'm OCD already. i pay cash for everything, if i don't have the money i do without.

Wish I had been like this 10 years ago but I am like this now with money..I hate hate parting with it. We have never lived beyond our means but have been very comfortable with the nice car/full time domestic and money on hand for what ever we wanted. We lived rather free-spirited, until I woke up one morning and was OMF, a few years time and Im 40 and we have nothing planned. So made the husband sell the nice car(broke his heart, mind you but told him we can live in our own home or the car when we are gray ) and got a cheapie run around cash, totally cut every unnecessary thing from our budget and approached every institution possible to get the funds to buy our place.

Its a very hard way to learn how to manage your money and Ive learnt how to stretch a rand which bizarrely, really excites me haha...and I sooo hope we don't fall back into the trap of nice unnecessary "things" or relaxed lifestyle when we finally claw our way out of this!

Also, this experience is also helping us to teach our children how to be good with their money and not wait for better days before starting to plan their paths in life! I don't know if its related but both mine and the husbands parents are all notoriously bad with money and have not really planned for their retirement!

 

[Alton Turner Blackwood]

Haha, now I don't feel so alone!! Nothing beats standing at the shop in the last week of the month trying to buy a few things and cards get declined..." Try this one, oh ok, now try this one etc etc" hoping one will go through!

We're pretty much in the same boat as you guys