TelBoy

To all the existentialist "only live once" comments, of course, you're all absolutely correct.

But the chances are, you WILL be here tomorrow, and the pain that can be caused by excessive indebtedness isn't worth the hassle, from what i've seen.

TelBoy

Mark, no i don't. But i take your point. That is, in my opinion, a necessary debt, and a justified one. There's a big difference. Nobody should, if they were advised correctly, have a mortgage beyond their means. Voluntary spending, on the other hand, is a totally avoidable exercise.

MarkO

And you never have/never will? Blimey. We'll start calling you "Tel-born-with-a-silver-spoon-in-his-mouth-boy" from now on.

TelBoy

Call me what youlike Mark!!

All i'm saying (again) is that a mortgage is the one loan which is almost unavoidable, for most people. It's not an "on a whim" loan, it isn't an "only live once" decision, it's a result of the fundamental need to live somewhere. And as such, is taken out with careful consideration about ability to repay (or should be).

That's the big difference. Got that now, or once more for luck??

NotoriousREV

My house buying decision wasbased on: how much will the bank give me? Cool lets buy a house for that much

MarkO

Not 'how much will I be able to afford'?

Well, Tel, there's your answer.

TelBoy

Indeed. One is (or should be) a factor of the other.

Well Mark, there's your answer.

TelBoy

davyboy, I agree, but isn't your conclusion somewhat at odds with your one-liner towards the top of this page??

MarkO

Actually, not necessarily. Our mortgage is a self-certification one, and the only restriction is that a) we put down a 15% deposit and b) I certify my own income (but don't need to prove it). Theoretically, with the way things stand at the moment, I could borrow the best part of half a million quid based on that, despite actually being unemployed as of Dec 31st! So earnings are not always relative to borrowing potential.

TelBoy

Hence my "should be". Let's not cross every "t", dot every "i" Mark, i think we know the general point that is being made here...

davyboy

Which part? This bit?

TelBoy

Nope, this bit...

"life is not a dress rehersal, you don't get another chance"

damian666

I personally cannot afford to buy a house on my *ahem* meager *ahem* salary (for the benefit of Andy Tang, my boss!!) so I am looking at housing associations to help.

They look carefully into debt that you have, including debt consolidation loans. I am really unsure if getting one is the way to go.

My credit card bill doesnt amount to much (around £1200) but if I got a loan it would have to be unsecured. This is what is starting alarm bells off in my head - I dont think you should be allowed to borrow money to pay off debt.

MarkO makes a point with his 'slush fund' but keeping money in a bank account at best getting 5% interest is uneconomic when you are paying back debts at 7% or even more interest. It is ALWAYS better to pay back quicker, if the loan is that flexible is it not?

davyboy

Now I am confused

Which part of that dont you think agree's with my post further down the page?

TelBoy

I'd have thought the first comment was a bit of a carefree, spend-today, worry-tomorrow sort of statement, whereas in the later post, you advise people to avoid debt. Maybe i've got hold of the wrong end of the stick. No big deal...

davyboy

Hey, its a good comment..........does not mean I live by it

chrome

..wrt to credit card surfing and offsetting against flexi-mortgage savings... inst the interest a nightmare to calculate and justify to the revenue come return time???


..Im thinking about a large one off loan to pay off all the niggly little debts I have (most from college) and the car loan...
catch is Im a single income family... so all bills etc go thru me as the wife has been ill for quite some time (bless her) so CC's are essential for those months when the car breaks, or when she needs emergency hospitalisation (and subsequently the sprog needs after school care so I can keep working, which gets paid with; yes you guessed it CC..)

I earn a healthy amount for an employee.. yet I have an overdraft
facility permanently available (which is the first port of call) CC's get used mainly for awkward bills (ie:big) or one off big costs like tyres and car servicing.

..altho the wife has been getting into her art lately.. so maybe a new career path for her while she is getting better..? hope so.

JoeyDeacon

The only debt I can see as acceptable is a mortgage. For 99% of the population it is the only way to ever afford to buy a house.

About a year ago I came to the conclusion that I hadn't actually been out of debt since I was 18 (Currently 29) and I dread to think of all the interest I have paid over the years on credit cards/loans. I started reading www.fool.co.uk a lot and pretty soon I had cut up all my credit cards. Now I know people go on about 0% credit cards but I hate to say it but you do actually have to pay the money back one day.

Impreza went straight away, that car cost me more money than I would have ever believed. The money I save each month is being used to pay off my credit card.

For those of you who are in debt and keep spending without worrying about it, all I will say is what will happen if you lose your job and can't get another? How many months will it be before you are totally screwed? To give you some idea the average person is 3 pay cheques away from being bankrupt.

Got a few months more to go until I am debt free but as I get closer and closer I have to say I feel a lot happier and more relaxed. I really don't know how people who have got massive credit card debts and loans sleep at night.

NotoriousREV

Joey,

This is where I am now. My consolidation loan is mainly to allow me to save money an give me the flexibility to dramatically drop my earnings if need be. At my current monthly payments, i willhave cleared £35,000 in 5 years, which is all well and good, but I have no spare income, savings or a pension, so I'm spreading my payment over a longer period on a much reduced interest rate. The extra interest that I pay if I go full term with the loan is only slightly more than if I were paying the loans over 5 years, and I don't plan to go full term.

No more loans for me and certainly no more credit cards .

Dream Weaver

OK Tel, not sure if you are still reading but...

Credit card amounts are not always from mis-spending.

I work for myself, and in an ideal world, the work would be finished 3 weeks after agrreing it, then a cheque would arrive and go in the bank. But over the last year it hasnt quite worked that way. So instead of finishing a job, getting paid, starting another, getting paid etc each month, you end up with 5 jobs running for 5 months.

In that period, becuase the work isnt finished (usually down to customers providing info) you dont get paid.

So what do you do when you dont get a wage for 5 months. You use your credit card to pay yourself, knowing that in 5 months, all the cheques come in and the debt is cleared. So thats where my CC amount has come from - not much I can do about it.

It also doesnt help when someone goes bank owing you £2k, which is mainly why I stil have the debt there.

It is stressful though - very [img]images/smilies/mad.gif[/img]

So there you go, thats my story, but occasionally there is the "Sod it, you only live once purchase" Only for PS2 games though

Dream Weaver

For everything else, theres Mastercard

Markus

Davyboy, sorry shock you.

What was I buying? well, lots and lots! Seriously though, the card was used for a lot of big things, for example, I paid for my car with the card, well, CC cheque. why? well it's a jap import and the company thus wanted a large deposit and a large payment, so I wanted some security, thus put it on the card. The car was 9k, so thus a big chunk was that. Plus I did purchase other white and brown goods such as TV's, dvd's., washing machines, hoovers. And of course running costs of the car, eg; mods (brakes, wheels, quad lamps, stereo, alarm, tyres) and normal servicing and fuel stuff.

I, foolishly I guess, did not consider it too much of a problem as I could pay off what I was spending each month, but it was the interest on the rest of it that was killing me. Then something hapened which made me realise I needed help if I wanted to be able to do something I really wanted (and I am deliberatly being vague here), and well, the debt consolidation was mentioned to me, so I posted up here asking stuff, and got help (Big thanks to Egg).

I HAVE learnt my lesson, big style. BUT, I know I could slip down the slope again all to easilly, but I'm being a good boy not to.

Hell, I could go out and get new AVO Coilovers, re do the tints, get new 18" wheels and tyres, get a MOTEC. Then get a new DVD player, plasma screen, new AV Amp, etc. ,but I'm not going to. I don't *need* those things, I *want* them, and there is the dividing factor.

The other reason for saving the 400 a month, is, as Mark said, a slush fund, in case something happens, if it's there, I'll pay off what I can of the loan, otherwise it'll stay there as 'rainy day' ,money.

As for credit card surfing, hmm, it did occur to me, but seemed too much hassle and I am a really, really lazy person. But I could have done it. But I wanted to cut my losses, consolidate the thing, and have one, fixed, monthly payment. which is what I have. and I'm happier than I was.

This also showed me how easy it is to get unsecured loans of large quantities. Which is always nice to know.