Is people's overspending on luxuries the problem with being unable to pay bills & mortgage etc?

Question

It seems as though everyone is blaming the banks etc ( not that they dont have some part to play in it).

But I think the overspending-on -luxuries culture in Britain is getting out of hand. Where everyone as a result blames others but themselves for Britains poor finance rate.

Whats your view?

Answer 1

Dave can you define stagflation?

Answer 2

Yes!This is a wake up call for people to live within their means!

Answer 3

I agree.

Maybe people should get a second job, invest in doing their oen business, sell their current luxuries and use that money to pay off those high bills they gave themsleves in the 1st place!

Answer 4

I agree.

Do you know the definition of a child living in poverty in this country includes the parents ability to buy them a new bike.  As if it's a neseccity.

We (as a country) seem to feel deprived if we don't get at least a fortnight away a year and a couple of weekends in between.  Couples start married life with £1000's of debt to have a 'fairytale' wedding.

Going without just isn't an option to some people.

Cutting back means only eating out once a week.

Answer 5

The culture of buy now, pay later and credit cards has brought about the present situation.  When I married in 1958 everyone used to save up for things - we didn't even get a fridge til we had saved up.  Nowadays, people want everything today and blow tomorrow.  Well - it has now all come home to roost.   Greed and easy credit are to blame.

Answer 6

Ironically if we had higher taxes we'd have less disposable income, we'd be keeping up with the Joneses at a generally lower level and the government would have more money to spend on improving the real quality of life, for example a truly world class education system. I still get cross when I think how much could have been done to the education system with all that money that bailed out the Northern Rock.

Answer 7

A lot of it has come from the debt culture and the unrealistic expectation that their house will rise in value by 20 percent a year to cover their spending.  The economy can't run on funny money for ever.

Answer 8

I agree thats true in some cases. I have a friend who says that the most important bills she pays are the mortgage then Sky. She is always behind with the gas and electricity bills and council tax etc. She thinks nothing of spending £100 odd pound on a jacket for her son and the next day she will be moaning that they are threatening to cut her gas off.

She now wants to get a dog which is going to cost over a grand. How mad is that?

Answer 9

Absolutely!!  If people are dumb enough to take on credit that they can't afford to repay in order to buy stuff they don't need it's hardly the bank's fault is it??  Too many people think they can't be happy without the latest tv, car, handbag, mp3 player, whatever, but what they don't realise is that getting it won't make them happy because there will be a newer shinier one along in a minute that they will want just as bad as they wanted the last one...

Answer 10

There are many factors why people are in trouble.

When we watch tv they are always saying get it now, nothing to pay for a year or so. That year or so catches up. We are in a society where we must have it all now, which is quite easy because of the irresponsible way that banks give credit. Many are stretched to far on mortgages, mainly because if it is there first home they do not always undestand the full cost involved. We all want to do our best for the kids, but it adds to the total bill of household running when really dear clothes are purchased etc.  Please don't get me wrong, there is nothing wrong with cedit as long as it is well managed.  I come from a relatively poor family but we were never in debt, because one thing was paid for, on credit or as it was then called tick, before another item was purchased. Of course the way bills are rising now those with limited monies after mortgage are not going to be able to pay the bills unless extra jobs are taken.  Many do not think this viable due to baby sitters and tax on the extra income.  We have been fed with the view you can have it all now, and of course we want it all now.  To finish, I am 69 and I would not like to be starting my life now, I could not cope mentally with debts of say £100,000 all I have ever owed in my life at one time was £7,500. and that was for house purchase. I have been very fortunate and respect the  youngsters for  coping with the emmense pressures in the world today.

Answer 11

yes, those who have enough

Answer 12

Hello,

(ANS) The reality is this, in my opinion you have a relationship with a bank (weather you like it or not) which means the responsability is 50% with the bank and 50% with the person (individual).

**In the past 10 years the banks can be accused of falling over themselves to offer loans, mortgages and credit in various forms. i.e. easy money. Why? because banks make profits from loans thats clear to me.

**During new labor under Chancellor Gordon Brown a climate of low % inflation rates existed which lead to cheap money. Plus high house prices which lead people into the false believe that they had more money than they did in reality (house prices & house value is all relative, its paper money only).

This has lead to a massive spending boom time during the last ten years, people in the UK now have x1 trillion £ in debt as a result. Whilst the UK economy boomed this boom was fueled ONLY by consumer credit or personal spending per individual. But for consumer fueled spending the UK economy would have gone into recession far far sooner.

**Now the UK is definitely going to go into a deeper recession because it is exposed to the USA sub prime mortgage crisis. i.e. UK Banks lent money to US financial companies in the anticipation of making a profit but the whole thing is a house of cards and is about to come tumbling down. Its a Disaster waiting to happen, its only because of geed in the banking system i.e. to make yet bigger profits.

Ivan

**Fortunately I have no debts or loans, or mortgage. but god help those that have?

Answer 13

I agree. pay council tax first, then mortgage, then bills, then food

Then luxuries eg car, TV , holiday

And yes a car is a luxury ! if I am short of money I use my bike instead of moaning about the cost of fuel

Answer 14

Anyone with a basic grasp of economics would have understood that this day was brewing from early last year .... I think anyone who doesnt understand basic stuff like how inflation rates can affect the interest rates and how the stockmarket can be seen as a leading economic indicator shouldnt be allowed to take out mortgages ;)

Answer 15

Not just in Britain. Here in the US it's the same thing. the insides of the homes of the middle class look like the homes of millionaires now. it's sad because most of the "things" we buy are on credit making things even worse!

Answer 16

Definitly,

You will be amazed at the amount of Plasma TVs etc in peoples homes yet they pleade they cannot afford their credit cards.

People should destroy all credit cards and live within their means.

Answer 17

Yes people do seem to overspend on luxuries , rent / mortgage  should always be the priority, then utility bills come next .

We can always cut down on food it wouldn't do us any harm , but bigger tvs and designer clothes  when you cannot afford to pay cash are for fools .

Answer 18

The trouble with plastic is that it is 'free' money, money you can't touch or see, but money that you can use.  For the last 30 - 40 years, people have been buying things, THEN paying for them, when the previous generations would save up to buy things.

Right now, society is living WELL outwith its means, buying without having the cash (collateral) to back up the purchase.As someone who hasn't got the requisite hundred or so forms of ID necessary to open a bank account, I must save money up if I want to buy the new (read: Second Hand or Pre-owned) TV, sofa, etc, while someone with a credit card will just put it on the plastic - not realising that £100 of plastic money may end up costing them £1000 or more, if they only pay the minimum amount at the bottom of their bill at the end of the month.

Sorry about the rant, but I hope I made a few valid points in there.

Answer 19

surely it depends on what you define as luxury. i know many people who struggle simply because they have no money, not because they spend it on "luxuries". most use their money  to ensure their kids can eat, stay warm and have clothes.