How much debt do you have & how do you deal with it? (Budgeting & Personal Finance)

[secret_no_03 959]

I haven't seen a thread about debt, personal finances, budgeting etc, so I guess it's time to make one.

I used to hate credit cards, always said I'd never get one, then I bought into the lie that you need one, got one, paid payments every month and the credit line went up and up and now it's at $5, 000, but I'm also in a lot of debt. Here's a list of all of my debt.

 

Credit Card 1 $3,510.09 (Sky fucking high variable interest rate, currently at 27.15%) this fucker is getting cut up as soon as it's paid off.

*minimum payment is around $111.

 

Credit Card 2 $965.88 (0% interest rate until November 15th when it goes to 24.99) (originally for emergencies, one emergency and a cash advance later and splurging because of some stupid idea that "Oh, I've done good lately I deserve a reward and there's no interest until November (besides interest on the cash advance) 

*minimum payment is $25.

 

Car loan $4273.06 at 177.09 a month, set to be paid in 2 years.

 

Phone payment $280ish on a 2 year no interest financing if paid off in time, $30 minimum payment. It was like $728.23 so you can do the math on how long it's been.

 

So, to add things up, that's $9,029. 08 in total debt. What's yours? Are you paying a mortgage, student loans, a car? Feel free to leave a comment below and share in the misery of adulthood 😂

 

 

Edited July 25, 2019 by secret_no_03

[Masato 365]

That's such a US topic! *lol* 

I have never had debts before as I am always saving and conciously spending my money. 😏

I don't understand how people can spend money they don't have.... and have a hard time paying back? Better save for your goal and do an extra job on the side than be needy now and suffer in the future.

 

I would only take mortgages to buy property because that is a solid investment here. 

[spockitty 643]

On 7/25/2019 at 8:25 AM, Masato said:

I don't understand how people can spend money they don't have.... and have a hard time paying back? Better save for your goal and do an extra job on the side than be needy now and suffer in the future.

That's...not very realistic for a lot of people. And calling people with debt "needy" is a bit unfair imo.

 Saving up for things that are not neccessary for your day-to-day life is fine, although sometimes not achievable either.

 

Getting an extra job is at best a short term solution, if you want to have a life outside of work at all, and actually enjoy the things you're saving up for (I'm not even factoring in having kids or family). I've worked two jobs for a few months, a few years back, and I've had a grand total 5 hours free per day. I went into my night shift at 8pm, finished at 6am and then by 8am I  had to be at my second job where I stayed till 4pm. That's no way to live. 

 

I suppose you're coming at the topic assuming that people take loans and fall into debt because they spend money they don't have on unnecessary, extravagant things. 

 

 

Edited May 30, 2020 by spockitty

[platy 3018]

0 debt. I got gifted a credit card twice, I just cut them up and went straight in the garbage. I'm not good with numbers at all, so rates and interest and that kinda stuff is very confusing. There was one time when I went a few hundred £ into my overdraft but thankfully there was no interest (because student accounts have an agreed overdraft amount w/o fees) and eventually I managed to pay it back. I'd rather use a debit card. Money comes in, money goes out. Simple.

 

I only started to budget recently, after bills I have a set amount of money to spend on things that really matter to me like books, food, my health and supporting artists on kickstarter lol. I'm trying to cut on random spending by  only making purchases which I'd planned before. Everything else goes in savings. 

 

A car would be cool, but in the grand scheme of things it's extra spending that I'd rather put into public transport since I have the choice. I also use finance apps to keep me on my toes.

 

I guess I'm in a privileged position where I'm young, childless and don't have a mortgage and live in a country that doesn't have a fetish for putting people into debt. I know that in many cases people don't go into it willingly and it's a trap that's hard af to come out of, specially if you have health issues and/or a family. 

 

Edit: I just realised that I have near 30k in student debt, but I'll only start paying it back once I earn over a certain amount per year and after 30 years it gets written off, so to me it doesn't even exist. And yeah there's interest on top of that too, but it doesn't impact my life in any way so far. 

[Bear 1817]

0 debt. Only debt I had was a student debt back in the day, but I actually paid it down while studying with the money I had loaned for studying. Don't know how I did it because it's kinda weird, but I am happy I did. Fuck debts.

 

 

 

[madygrain 515]

I don't have any debt, never had. But I don't own a house, don't own a car and I don't have a college degree. Never took a loan or used credit. What I do have is a current job position in banking. So about this:

2 hours ago, Masato said:

I don't understand how people can spend money they don't have.... and have a hard time paying back? Better save for your goal and do an extra job on the side than be needy now and suffer in the future. 

 

People spend money they don't have because either they don't have enough money to tackle whatever they are pursuing (i.e. real state, business, being able to pay for education, taxes, etc), or they don't have any other money period.

 

In the first case people can struggle in different degrees to meet their payments depending on a lot on stuff. Most people are able to pay what they own when they are asking for money for a single focused thing. But when we're talking about the second case, people who ask for money in order to get by, pay basic bills or are on a rough spot most people fail. Even if they get are successful in having income or in adquiring income sources like the second job mentioned,  the money being lended to this people is more expensinve because the risk the institution is taking lending money to people in this circumstance is bigger. So, if it was hard for someone in this position to just pay someone, it got even harder because the lender will charge more money for each $ they lend you. They also usually have fixed penalties when you fail to meet conditions. That may sound like "if it's fixed it's fair for everyone and makes everything simpler on the consumer end wich is a new thing in finance". Wrong. If two people ask for money and one ask for $120 to pay bills and other one ask for $5000 to buy furniture and both people miss a deadline both will have to pay the same penalty, let's say $20. If both miss the first two payments the first one sees his debt increased by 33% and the second one by 0,8%. If the first person struggles so much that they have to ask for such low ammount to make ends meet seeing such increase in debt is a death blow (specially when this happens because they where broke; they had no money so now they own more money... so even though they have no momey they have even less money).

 

TL;DR being poor is actually more expensive because people don't think you'll actually be able to give the money back so they squeeze you so you hardly could pay anything back actually making the prediction you couldn't pay back true and therefore validating it.

 

If you are very very poor try to earn money. Asking for a loan is a very brief relief that will very surely bring hell upon you sooner than you think.

 

There's also people who will ask for money and blow it instantly. We were doing risk assertion for a customer that asked for a credit yesterday. When looking into his movements we saw he already asked for a 1500€ elsewhere and got it just as this month started. Then, last THURSDAY he blew 500€ on Bingo (and he either didn't win shit ot the didn't put it back into his account). There's a neverending ammount of people like this. Or that think that they bank will straight un gift you money. Or that don't understand what a debit card is. Or that they can pay off their current debt with a cheaper debt.

 

If you don't have those kind of problems you should be very grateful you got an education as basic as it may be. When dealing with this stuff it could literally save you for ruining your family's life forever.

 

 

 

 

Edited July 25, 2019 by madygrain

[secret_no_03 959]

5 hours ago, spockitty said:

That's...not very realistic for a lot of people. And calling people with debt "needy" is a bit unfair imo.

 Saving up for things that are not neccessary for your day-to-day life is fine, although sometimes not achievable either.

 

Getting an extra job is at best a short term solution, if you want to have a life outside of work at all, and actually enjoy the things you're saving up for (I'm not even factoring in having kids or family). I've worked two jobs for a few months, a few years back, and I've had a grand total 5 hours free per day. I went into my night shift at 8pm, finished at 6am and then by 8am I  had to be at my second job where I stayed till 4pm. That's no way to live. 

 

I suppose you're coming at the topic assuming that people take loans and fall into debt because they spend money they don't have on unnecessary, extravagant things. 

 

-

 

Personally I've had a credit card for almost 10 years (the limit staedily growing lol), currently my debt's at around $2000. Although my interest is at 10% on this one, jfc @secret_no_03 what are those interest numbers O-O 

 

I've also just taken a car loan for $6500 (at 6,5%), because my old one pretty much fell apart lol. 

 

I can't imagine living withouth a credit cart at this point, although when someone asks me if they should get one, I always VERY adamantly tell them not to if they can help it. 

 

That interest rate is your first credit card, well the first one, when you're desperate and don't know anything about rates, you take what they'll give you, at least that's what I did 4 years ago when I got my first card.

[secret_no_03 959]

6 hours ago, platy said:

0 debt. I got gifted a credit card twice, I just cut them up and went straight in the garbage. I'm not good with numbers at all, so rates and interest and that kinda stuff is very confusing. There was one time when I went a few hundred £ into my overdraft but thankfully there was no interest (because student accounts have an agreed overdraft amount w/o fees) and eventually I managed to pay it back. I'd rather use a debit card. Money comes in, money goes out. Simple.

 

I only started to budget recently, after bills I have a set amount of money to spend on things that really matter to me like books, food, my health and supporting artists on kickstarter lol. I'm trying to cut on random spending by  only making purchases which I'd planned before. Everything else goes in savings. 

 

A car would be cool, but in the grand scheme of things it's extra spending that I'd rather put into public transport since I have the choice. I also use finance apps to keep me on my toes.

 

I guess I'm in a privileged position where I'm young, childless and don't have a mortgage and live in a country that doesn't have a fetish for putting people into debt. I know that in many cases people don't go into it willingly and it's a trap that's hard af to come out of, specially if you have health issues and/or a family. 

 

Edit: I just realised that I have near 30k in student debt, but I'll only start paying it back once I earn over a certain amount per year and after 30 years it gets written off, so to me it doesn't even exist. And yeah there's interest on top of that too, but it doesn't impact my life in any way so far. 

Where in the world can you take our 30K in student loans and just forget about them until they disappear? It should be the destination of the world for young college bound people.

[spockitty 643]

38 minutes ago, secret_no_03 said:

That interest rate is your first credit card, well the first one, when you're desperate and don't know anything about rates, you take what they'll give you, at least that's what I did 4 years ago when I got my first card.

That's so shitty, I'm sorry you got played like that. I think even my first credit card (that had a limit of 300$), I had when I was like 19, had maybe 11 or 12%.

 

These days banks are tripping over each other to get the client, offering discounts on interest rates, on comission, on anything really. But we're a "developing" country and the economy is doing pretty good atm so I guess there's no comparison to US AND also that's a bit of a different discussion. 

[secret_no_03 959]

15 minutes ago, spockitty said:

That's so shitty, I'm sorry you got played like that. I think even my first credit card (that had a limit of 300$), I had when I was like 19, had maybe 11 or 12%.

It was $1K when I first got it and over time they kept raising the limit and I used to be terrified of having $1K of debt, but then I moved and needed all kinds of shit and it exploded over nearly a year into what it is now. I'm going to try and pay double or triple the minimum payment in hopes to get it back down to around $1K. The only saving grace that doesn't drive me nuts is that it'll be paid off right around the time I have the car paid off, so this isn't the final hurdle which would drive me even crazier.

Edited July 25, 2019 by secret_no_03

[platy 3018]

3 hours ago, secret_no_03 said:

Where in the world can you take our 30K in student loans and just forget about them until they disappear? It should be the destination of the world for young college bound people.

Basically England raised the university prices from like £4,000 to £9,999 a year a few years ago. When you enrol into university you automatically take a loan. You start to pay off this essentially invisible debt once you earn over 24k a year (I think) and the payments get automatically deducted from your salary. It's a small amount like £100 a month, something like that. If you haven't paid it in 30 years (I think²) it disappears. To summarise the government has played itself.

 

[chocobuzz 752]

In Finland if you take a student loan and you graduate on time, you may get a student loan compensation which basically means the state pays off 40% of your student debt. I think that's kinda cool.

 

I myself don't have any debts, I'm halfway through university and I have enough savings so I can do fine without any loans. And even though I don't really need to worry about money, I still keep track of all my expenses. I write everything down in an Excel spreadsheet and if it seems like I've spent a lot of money on some useless stuff in the previous month I'll try to be more careful the next month. So I don't have any strict budgets but I still always watch how much money I spend.

Edited July 26, 2019 by chocobuzz

[YuyoDrift 1540]

Ooh, a "how fucked are you in debt"  thread. Nice.

 

(I'm American btw)

 

Back in Chicago, IL I was able to pay off everything for my schooling, so I owe nothing there. I never give myself credit there, but I should.

I also managed to pay off 3 credit cards (while spending just as much on them) very easily, as I made a lot of money at my last job with overtime. Young kid with a nice job, why not live a little, right? I'd say I bought everything I ever wanted in my earnings range, so now I rarely buy anything if it wont stay with me for 5+ years.

 

Here in Denver, CO (and all this year) however, life has not been so kind to me or my vehicle, and with repairs and health insurance steadily creeping to a point where it makes no sense, I'm questioning whether life here was a wise decision. Contract work may play a large part to it, but it was a decision I made, and a carefree way of earning experience and work while I focus on other things. I'd say that once I was settled in, I had a combined debt of about 9-10K, and while that may suck a bit, I always plan to handle scenarios like this with large payments and financing options that don't hurt my credit score. I think I'm down to about 4K that is not locked down in payments for the next year or so, so if I wanted to I could pay it all off in one go, but like I said, I would be screwed if something happened and I needed my cash to take care of it.

 

$0 debt is great, but to maintain a credit score at it's highest, you need to play their stupid game here in the USA, and spend a little/pay it off soon. People were so wise a few years back to roll-over remaining debt into a balance transfer to another card, but those companies have wised-up and charge a percentage fee now lol.

[spockitty 643]

On 7/25/2019 at 7:07 PM, platy said:

Basically England raised the university prices from like £4,000 to £9,999 a year a few years ago. When you enrol into university you automatically take a loan. You start to pay off this essentially invisible debt once you earn over 24k a year (I think) and the payments get automatically deducted from your salary. It's a small amount like £100 a month, something like that. If you haven't paid it in 30 years (I think²) it disappears. To summarise the government has played itself.

 

Yeah, I was about to ask what percentage of people actually gets to the stage of paying off the debt. This system sounds like an outright incentive for tax fraud. I'm sure that declaring lower income to evade paying off this debt would be rampant in my country lol

 

On 7/25/2019 at 8:56 PM, YuyoDrift said:

$0 debt is great, but to maintain a credit score at it's highest, you need to play their stupid game here in the USA, and spend a little/pay it off soon.

This entire system sounds over-complicated (at least as far as I can even understand it). 

 

I know that in my country it is said, that banks look more favourably at people who had taken at least one loan before and are paying it off all in time, than people that have never had a loan in the first place, but it's hardly a dealbreaker. Hell, when I was applying for my car loan the lady asked for a fixed amount I spend every month (on rent, bills etc.), I gave her a number and she was like "you might want to declare a bit less than that"  and that was it ^^;; Credit scores in US sound like a cutthroat business~ 

Edited May 30, 2020 by spockitty

[YuyoDrift 1540]

15 minutes ago, spockitty said:

Credit scores in US sound like a cutthroat business~

I'm not an expert in finance, but I'd say that the value and prioritization in your credit score when it comes to loans and investments surely does make it feel very cutthroat here. Given that many credit card companies lure in many materialistic and ignorant youths (I was once one) like American Express and stores that have deals with VISA and MASTERCARD (think brick and mortar stores like Best Buy or Airlines/Gas Stations) with "great" intro APR rates, it's hard to assess whether owning more cards or how often you use them, will affect your score.

 

Not paying them off on time does ding it, but sometimes never using them does the same thing lol. It also depends on how long you've had your oldest card for. I think for me its like 5 or so years now, so this has helped me maintain a steady score. If I were to suddenly say "I don't want to use this card anymore", I'd actually hurt my score more if I were to call and cancel it, as opposed to just leaving it in your bedroom drawer for a rainy day emergency.

Same goes for bank accounts, ironically.

[Flame-X 441]

Student loans is my only major debt since I still owe over 20k. As for credit card, I pay that off on a weekly basis so no problems there.

[LIDL 692]

I have no debts. Did budgeting nightly so I know where all my money gone.

 

Got no student loans. 

 

Always pay my bills on time. Including Credit cards.

 

Paid all my taxes.

 

House and car were paid in cash.  Cos I hate paying up interests.

 

My retirement plan are on track.

 

My credit scores are mighty fine. The key is being responsible with money. Cos even if you won millions from lottery, if you are not responsible, you will be back to square one in no time. Or even poorer than you were before. Lots of examples already. 

 

I got a few friends who keep buying clothes and expensive shoes and bags, either new or thrift, all the same, and I don't even understand why. They were even starve for that too. They only wore those once and get a new pair. That is such excessive spending just because they care too much about what people think. They would ask to borrow my cash sometimes but I just can't give that, ever. I know for sure they will never able to pay it back with such habit. Those celeb lifestyle are not for everyone. But only a few people seems to understand that basic stuff. Besides, those celebs often got freebies designer brands to fill up their walk in closet and dressers anyway.

Edited July 29, 2019 by LIDL