how in debt is really in debt?

You should really make sure you ALWAYS pay your loan installments, though, especially if they charge you extra for missing payments. Do they? I'm surprised you even have the option of defaulting - is it not taken by Direct Debit?

I am about £400 overdrawn, have a loan which is probably now down to about £6000 and which I pay back in monthly installments of £260, and I owe £1000 on a credit card, paying off about £100 per month [wishful thinking]. I consider this fairly normal and manageable, but then I only earn about £800 pm after tax so there's not much to play around with really.

then there's 150 back a month off that other loan...

so i guess i have round 650 a month left disposable. which i'm predisposed to spend on beer.

I agree with Pink - if you're bringing home £900/month after tax you shouldn't have a problem with the loans. What do you spend it all on??

That said, it doesn't look *that* bad, considering how much you earn. Are you still able to save a little bit for emergencies?

£50 a week for food and socialising
I think we spend about 50/70 pounds on food per week. :-(

My love life may be a disgrace, but I'm in perfect financial shape. Never had a credit card, never had a loan, don't have a mortgage, never even run an overdraft. DEBT! FREE!!!!

I'm not going to say how much disposable I have *now* because I make myself sick. :-)

It's certainly possible if you really want to clear your debts.

i've been trying to drum up puritanical instincts from deep inside me, but then i get bored and go to the pub.

My "college" was free!

although they are student loans which have a pretty low interest rate and are easy to pay... credit cards (of which I had $6,000 in debt) were much more difficult to pay off.

Do we have a thread for confessional stories about people in seemingly inextricable debt traps where we react with a deep ambivalence, arising from the combination the undeniable fact that they are well and truly fucked but also feeling like there are many places along the way where this could have been made not as bad? Because I feel like those stories keep getting posted and here's the latest:

https://www.wealthsimple.com/en-us/magazine/money-diary-couple-debt-us

What I am struck by here is -- I don't 100% understand how this is happening to them. A $360,000 house is an expensive house but it's not actually the kind of house a family with a $160K annual income can't afford. How is it that they literally owe the same amount on the house now as they did when they bought it 11 years ago? Their kids go to private school, but that's costing them $15K a year. Again, that's expensive, but -- that level of expense is pretty normal for someone with that household income! It doesn't sound like they're trying to live like rich people, it sounds like they're trying to live like people who make what they make. And they can't do it! Is it just the law school debt eating everything? I have questions.

that story in miniature:

https://pbs.twimg.com/media/ClchMaWVYAUG_-S?format=jpg

my favourite moment recently was when I was got the: "Your overnight balance was £5.18 (of my two grand overdraft) please ensure you have enough money in your account to cover any payments." Yeah give us a sec, just waiting for my ebay scam victim to pay up/praying for rain/selling my arse/priceless family heirloom/using my 15 yr old laptop to mine bitcoins ...etc

we react with a deep ambivalence, arising from the combination the undeniable fact that they are well and truly fucked but also feeling like there are many places along the way where this could have been made not as bad?

i mean yeah but i mean about everything not just yknow debt

But what are their candles? People on the internet going crazy over their kid eating Whole Foods sushi but ... you can't spend hundreds of thousand dollars on Whole Foods sushi, right?

they are clearly living well outside their means, and can't stop using credit to underwrite their lifestyle, so they're stuck in a cycle they're never gonna get out of

They took out their second mortgage which is basically why they haven't paid off anything.

But that's what I don't get -- their means are .... pretty good! Every aspect of the lifestyle they describe sounds... totally normal for a household with two parents working professional jobs. OK, not the leasing cars. But I just feel like the BIG costs of life (housing, education, and medical -- because as far as I can tell they have health insurance through work) are no more than what they should be for people in their income range! I just find myself wondering whether maybe the dad (who "manages" all the money and his wife doesn't seem to see it) has some huge undisclosed spend, like a gambling issue?

Interest rates in 2007 were ~6% so if they haven't refinanced the entire thing...then yeah. This shit isn't magic. I am sure they are just waiting for an inheritance to kick in. Or as they said one of them to die.

I guess one big thing these guys got wrong is that if they had that much debt to start with, maybe they shouldn't have put $70K in a 401(k) to start with, but should have paid down the high-interest debt instead of starting to save? But I mean there starts to be a psychological angle. If these people's attitude is "it is a given that I'll waste any money I don't lock away, if I somehow pay down the debt with a windfall I'll end up back in the same spot anyway," which is what happened when their parents tried to bail them out, then .. well, I don't know, I don't know what you can do in that situation.

xpost they make about $160k now (likely made 5-7% less in every previous year). After taxes, the mortgage, kids, food, stupid car leases, dogs, that goes pretty fast. It's doable, but these people are idiots.

I mean their mortgage each month without any insurance, points, taxes etc is already $2200.

How much could they be paying on that mortgage? Surely no more than $2K a month? Their school fees are $1K a month? Another, what, $800 a month on stupid car leases? I'm just trying to figure out whether I think a) there's some big expense they're not disclosing b) their background level of stupid spending is so high that e.g. every month they buy a new couch they like or take a $2k vacation because "they deserve" it or c) (maybe most likely) this is the spending level they've been at for 20 years without commensurate income, all financed by high-interest credit card debt so that they now have thousands of dollars a month in minimum payments just to finance the debt they've accrued over decades?

xp OK $2200 (I didn't see that in the piece and it sounds high but I guess I'm not factoring in the higher interest rates at their time of purchase..)

c) is definitely a big part of it

even if they've somehow got all their credit card debt on 0% cards and they're only repaying the minimum each month, they've got 15 of them so it's gonna add up

netfilx

their kid's school cost $30k a year without financial aid! That's more expensive than tuition at an Ivy in the 90s! The fact that a middle class family has to apply for financial aid for high school is the real horror story. Presumably there are people that can easily pay that much, which is even more awful because it shows the incredible income disparity in this country.

Or they could just go to public school. Private schools are all about reinforcing class structures. They can charge whatever they want.

Presumably the price of tuition is a feature...

I kinda don't want to veer into "judging other people's parenting" territory, esp. as someone who doesn't have kids.

Our next-door neighbors take expensive vacations, and they get to euthanize their dogs every couple months

er, what?

Oh, I judge them for that. When people use their kids as props to extend their own privilege, and duck behind “parenting choices,” I’m damned merciless.

(Not that you were saying that...)

i mean, that is my instinct too, esp. as someone who went to public school through high school, then got a scholarship to a college where most of my classmates were extensions of their parents' privilege, and it was a great example of the Marxist concept of reproducing the means of production

to the point where, one of my classmates that I spent many afternoons discussing critical theory essays in academic anthologies, I recently discovered, had recently published an essay in a critical theory anthology of the exact same kind we read in college

these ppl should not be getting financial aid to put their kids into private school

the financial aid is from the school. It's along the lines of overpriced luxury goods that are perpetually on sale for 40% off

though now they could put money into a 529 plan and use it for private school tuition

of the things they're telling us about, the private school seems like the most financially baffling choice if they're not balancing it by cutting back in some other area. if $350,000 houses are typical where they are, can the public schools really be so badly underfunded?

that being said i think the sushi anecdote could be way more revealing of what's going on under the surface. i'm betting everybody in the family has all kinds of gadgets and shit they don't need, probably buying $25 staplers and $50 deluxe vinyl reissues of stuff and the like, super expensive cable package when all they really need is like the internet, netflix, and a library card for movies. all these transactions that don't come up in articles like this because to people with serious lifestyle creep they aren't visible as causes of debt the way the $10,000 and up items are. i get that when both parents work it's easy to fall into eating out a lot and stuff but i would love to know how often these idiots muster concepts like "might be a night to just throw together some grilled cheeses and canned tomato soup." when a meal for one of your three kids, before the drink, costs $15, things are horribly, horribly wrong.

netflix-wise i really do think this would be a viable reality show, in the gordon ramsay "someone comes in and yells at you and makes you change everything" genre. if anybody should be getting austerity forced upon their economic lives it's people like this.

would watch

would watch if the ramsay figure also ranted about people with money having no stake in public education being dangerous to society

Maybe someone can get Adam Corolla to do a podcast about declaring bankruptcy makes one a man's man

if $350,000 houses are typical where they are, can the public schools really be so badly underfunded?

uh, where I am $350k houses are a steal, like average is like $600k, and the public schools are largely considered bad

The prices of their two houses for the years that they bought them were not cheap.

nobody needs a 350k house and im in dublin folks

theyre an example, among other things, of shitppl justifying their shittiness by just pointing to their kids and wailing "its for them!

Maybe we should figure out where these people live? Like, if they live in Pittsburgh, fine, probably not cheap. But as someone else mentioned upthread, Boston area, totally reasonable price

If they were renting their house, the rent would be about what, $2400/month? Is a 4 bedroom house where you live considered expensive or cheap for the rent of $2400/month?

Median price of a house in Portland is now in the near neighborhood of $300,000. Which is not good. Housing cost and unaffordable rents are considered to have reached the crisis point around here, because wages and salaries have not risen enough to support this kind of an overblown market.

xp 2400 euro pm v much lower end of a 4 bed but then we dont know city centre or even what city

160kpa kinda makes it redundant tbh

did... a sarahell write this

Median home value in Portland is $422,400

???

If it cost? (valued at) 360k to build their house in 2007 and if they live in a Boston suburb, I would assume they could sell it for at least $750k now (without knowing anything about Boston suburbs). I've only bought places in Brooklyn, Queens and another country so I can't really gauge other cities.

median house price in Sydney dropped 7.6% to $1,144,217 this year, so as usual megalols at any American opinions on this topic

aussie dollars

???

Considering the pattern of brilliance of these people, they probably could have done better by not building their house, but buying one that already existed. Okay, the building the house detail is one that didn't sink in until now ... I bet their General Contractor did very well financially from the job

That’s about $830k American. Zillow says the average home listed for sale in NYC is $825k

Yeah, I think you can still get one bedroom apartments for maybe in the 400k range in some neighborhoods in NYC.

Average in terms of residential real estate sales is such a non-informative measurement ... I mean, it gives you some sense of comparison between different areas, but it doesn't really say much about what you can actually buy because there is so much variety. Generally they go with the median value.

i am willing to concede that as a likely-permanent renter, i know very little about home prices. something about their overall vibe and the sushi price made me think they'd likely gone for a cavernous mcmansion when they could have gotten a nice, humble old ranch. maybe that's what happened. or maybe, as i believe, the real problems are in the smaller-ticket purchases.

that being said - one kid's 11, one's 13, one's 18. given their socioeconomic status i sort of imagine the 18-year-old is going to move away for college. so sell the house and trade down for something a little cozier, so long as there's room somewhere to put college kid up during the holidays. and to the extent that they may have overbought in the first place, use this as an attempt to shift towards ranch life. i get the vague impression they're avoiding making cutbacks of any kind because they think their world would come tumbling down if they sat down their kids and said "we're not super-rich and can't live like super-rich people."

They know they have to slice their overhead by like 60% and she needs to start using her JD to make money. They just don't want to do it.

not sure you can automatically make more than 70k with a JD

First year associates make around mid six figures most places.

They flunked out of a credit counseling program!

Like, if they live in Pittsburgh, fine, probably not cheap.

my mom owns a house in pittsburgh, in an area with good schools, that is worth a third as much. probably not big enough for a couple + three kids, but still

xxp hmmm that is higher than (double) what most salary websites say. anyway, she hasn't used it for 15 years, and that seems bad.

it depends on the size of the firm but especially in the NE cities it's pretty much standard across all the firms.

since when and i may be missing out on something american here is a ranch small

ranch-style house, one story generally modest by us standards, 1000-2000 sq ft, also tend to be older depending where you are

ty

Most things in the U.S. are available in both ranch style and nacho cheese style.

Rancho only available in the southwest though

my neighbor euthanized their dogs nacho cheese style

euthanising the kids here might go some way to ameliorating their issues. euthanise their leasesd cars next