Can you live WITHOUT credit ?

Hi TSR

, it’s me, Supernova !
I’m intrigued by your thoughts on this subject, because the current situation has freaked me out ...

Credit cards, over drafts, loans... they all seem so, well, normal. Are they a sign of living beyond your means? Impatience, perhaps ?

I have met a lot of flashy people in my time (or so it may seem) and a lot of it is due to credit cards and loans... it all feels a bit empty and meaningless. Kind of like the stuff you spend it on isn’t really yours...? It’s showing off stuff you don’t really have.

Obviously, the biggest source of credit for most of us is a mortgage and it is a BIG commitment. Especially if your signing into it with someone else.

I don’t really know what point I’m trying to make here, but I just wonder... is it possible to live life having no debts at all? Is living within your means overrated ?

Reply 1

999tigger

Original post by Supernova36

Hi TSR

Depends whether we include mortgage or not.

Everything else is possible for a normal person to live within their means. You can ofc choose not to have a mortgage.

Reply 2

Lizzillo

The only credit I have, besides student loans, is an overdraft for emergencies or for payments before my SF comes in.

If I can't afford something I simply wait or budget it in. I don't want to have huge debts and repayments hanging over my head. And I like living within my means, why would I want an impulse buy or designer clothe debt following me around for years and years, when I can't guarantee my circumstances won't change and I'll he unable to pay off my loans and then face those consequences.

My overdraft is only used to pay off like a rental deposit just before SF comes in, or if the fridge breaks etc and waiting to save isn't an option, and it is paid off and budgeted in as soon as possible. Student loans are a necessary and since I doubt with my career choice I will ever pay them off, I don't even really class it as debt.

Maybe I'm just a worry wart though 🤣

I do hope to get a mortgage someday, but I'd ideally like to have a high deposit so even if something bad happens years down the line, I'll still be able to afford the mortgage rate or if the rate increases it won't cripple me.

Reply 3

TheMcSame

Can you? Sure...

You'll likely miss out on things like owning your own house, going to uni and maybe even having your own car unless you're either starting life well off or you manage to pull money outta somewhere. If you're not well off from the get go? Well, god forbid you end up losing your job, especially at a time like this where the job market is going to be f*cked.

Some debt really is kinda necessary for most people. Only those who are well off, or suddenly stumble upon a lotto win would be able to get by without debt. But even then, debt can actually be beneficial to those who are well off. How? Well, by borrowing money you keep your money in your hands for as long as possible, that means you can put your money to work gaining interest or whatever instead of throwing it all at a purchase. The end results? You could earn back what you lose in interest essentially making the purchase cheaper. Of course, that's for people who are really well off and have the kind of money that generates significant amounts purely from interest.

If you want your own house, it's kinda necessary, even if you're well off it's just so you have money set aside for a rainy day. If you're making the kind of money that you can just drop an instant payment on a house, you likely earn enough to offset any interest costs through the interest you can earn from your savings, in which case, credit would be preferable.

Honestly, that really goes for most lines of credit. It allows you to hold on to your money for those rainy days. I'd rather drop a grand or two on a car and pay it back like £300 a month than nuke my savings, drop say 10K on a car and suddenly end up not having a job with not much savings to keep me ticking over until something comes up.

In other words, credit is really as helpful or as ridiculous as you make it really.

Reply 4

username5027880

Yes I definitely can live without credit and do.
Fortunate enough to own my own property without having had to take out a mortgage.

Reply 5

username2908878

Original post by Lizzillo

Original post by TheMcSame

Yeah, I agree with you both I’m this. Interesting, because it can be very useful but can also runaway with you and become out of control. I’m similar that I have no overdraft or loans and a very very small credit card limit for emergencies (but I am slowly building up an emergency fund of my own tbh).

What spurred me to write this is this old programme called ‘spendaholics’ that’s on YouTube, it’s about 15 years old now BUT it’s about people who have 12k-50k+ of debt because the overspend on designer clothes, shoes, bags, partying etc... and when you look at the clothes years later they look **** and so outdated it’s such a waste of money. The only thing I think that stands the test of time is a mortgage I think.

but this corona situation looks like it could be a disaster for those who are in a debt cycle, I wonder how they’re gonna get out of it :dontknow:

Reply 6

londonmyst

No.
12 credit cards, interest free periods and overdrafts are essential for managing large bills.
I wouldn't have been able to pay tuition fees without student loans.