Car trouble
[I] have a mate who worked at Big W part-time. Three to four years ago he bought a $20K BMW with a $4K down payment, 10% interest over seven years.
He got a new job early this year that pays a little better but not much ($28-$30 an hour FT if I remember correctly, he'd just gotten a pay raise).
A month ago he traded in his Beemer and put some money down ($12K trade-in for the BMW, $5K cash) to buy a BRAND NEW HYUNDAI for ~$60K. Similar loan conditions I believe, 9.5% over seven years.
Both times I tried telling him it was a bad idea. Both times he couldn't see it. He's 26.
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Read MoreRemortgaging too close to the sun
A woman I work with built a four-bedroom house in outer Melbourne for $200K in 2009. She has remortgaged so many times to go on holiday and buy useless items that she now owes more than her original loan. She and her husband both took $10k each out of their Super (retirement savings) during Covid and currently can’t afford $119 to update Microsoft.
| Deleted User
Watered down wages
A friend of mine — who is very bad with money — and his girlfriend bought some sort of water filtration system from a door-to-door salesman. He has to pay something like $300/month for this filtration system. He was all stoked because it came with a free set of pots and pans.
Fast forward a year and his girlfriend has broken up with him, moved out of the house, and he's had to sell his home because he can't afford to live there.
The water filtration system is now sitting in a storage unit where he still pays $300/month for it because he's on a two or three-year contract.
We have great water quality in my area.
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Explore better ratesLove makes you do crazy things
About 15 years ago I worked with a man whose wife worked at a bank; they'd been happily married for 20-odd years, and since he and I were both petrol heads we'd chat about our toys. He had a nicely modded Maloo, wicked 4x4 campervan, trailer, Harley, quad, jet ski, everything. Meanwhile, she had all the nice handbags, sunnies, and shoes she could ever want.
I was curious how he and his wife could afford all these things, plus their mortgage on a decent home in a [nice] area, as (I assumed) he and I were on a similar wage, and it's not like his wife was a bigwig in corporate finance, she worked at the local branch. He just said, "No idea mate, the wife works at a bank, she takes care of all that stuff."
One day he comes in white as a ghost; it turns out every time he'd muse "Jeez, wouldn't mind a dirt bike for a bit of fun on the weekend" his wife would forge his signature on a loan application that she would then approve without anyone knowing. She would then juggle funds from one account to another to make sure none of them got flagged, basically a one-woman ponzi scheme because she was obsessed with keeping her husband happy. She got busted when the branch upgraded their IT system and they had to come up with $380k overnight.
To his credit, he didn't want to press charges or get divorced, but everything got sold and of course, she got the boot from the bank. He then found a job closer to home because they only had one modest vehicle meaning he was on the school run. The last I heard she was in a 12-step program.
Making it to the other side
I bought a house with my girlfriend at the time, we maxed out our mortgage and immediately started plowing money into the house for renovations.
One year later (the start of COVID-19) she began having an affair with a coworker, my mental health plummeted to the point a few of my friends broke lockdown rules to come and get me out of the house to take me somewhere safe. This entire time she was just leaving the house for days without telling me when she’d be back. A few months pass and she buys me out for just over £5k. Never mind the £15k I’d put into the house.
I spent the next two years working my way out of just over £15k debt. I cut back on everything, cleared all credit cards, changed jobs, and got my mental health back on track.
When I’m paid at the end of this month it will be the first time that I have zero debt, and I won’t need my overdraft to make it to the end of the month.
I’m now working at a start-up I love on a good salary with the lowest monthly costs possible. It’s the lowest I have ever been financially and mentally. But it’s possible to make it to the other side and I learned a lot about finances and myself over the last two years.
| Deleted User
Getting in and getting out
I went self-employed several years ago, with a few bits of consumer debt. I was convincing myself I was doing well but actually, I was working very long hours and not managing finances.
I made some silly mistakes. Car — bought an expensive car on finance which capitulated. Paid for two expensive holidays abroad. Didn't plan for tax bills in the business, and then got an unexpected bill to pay student loan costs for a year.
I was highly stressed and realized I'd topped out at £25k in debt.
So, I consolidated most of my consumer debt and outstanding tax bills. I had an overdraft of £3k and a student loan of £2k left plus a consolidated loan of £20k.
I did what's called snowballing. So, most people say pay down the highest-interest debt first. But, I paid the lowest debt amount, the £2k. That took me about two months. The reason I did this was that it felt like a psychological victory in clearing a debt.
Then, I focused on the £3k, which again took about three months. We made household decisions to live more frugally. The car that capitulated (5dr hatchback/family car — I'm married with two young kids) was sold for £800 scrap and replaced with a 2008 Ford Ka. That was a brilliant move. Had that car for three years and never had a single issue with it. Running costs were ridiculously high.
Secondly, holidays abroad for thousands were replaced with caravan trips to Haven during term time. Guess which holidays the kids loved most? Haven of course. I think we paid £250 to go to Ayr for a week in our little Ford Ka. It was brilliant.
The next thing was to go back from self-employed to a job. I needed the security of income. However, I decided to push it on negotiating and found a job that paid more than my self-employed income plus had an achievable bonus. With all the surplus money I focussed on reducing the £20k debt.
Life comes at you fast
Was earning really well, almost six figures. I bought a house at the end of 2019. A few months later, lockdown hit and I went down to my basic salary (my wages are doubled with a bonus as I’m a recruiter). Up till that point, I was very messy with my money, wasted loads of it, was always on holiday or out, etc. I lived with my mum before buying and before that owned a house with my ex who made sure I never worried about money either. We were a wealthy couple.
So anyway, I found myself with a mortgage, an empty house (didn’t even have a sofa), a broken boiler, and various other house things going wrong such as fences breaking, leaks, and rotting trees. Then my precious cat died and landed me with a £4K hospital bill. I ended up getting in £26k worth of credit card debt.
Opposite of inheritance
For me, it was (is) my parents who have always been in debt. My dad lost his job in the 2008 crisis and never really recovered, did odd jobs here and there but never had enough money for family upkeep. The extended family was there to help.
I graduated uni in 2018 and when I got back home from my uni town, my dad had taken out two massive loans to put down a deposit for a house that was too expensive for him to afford, under the assumption that I would help pay the monthly payments. He somehow managed to fake his income to get the mortgage approved. One of the two loans he took out from my mum's account.
While I could just let them deal with their finances, I couldn’t physically see my family go through this. I took a series of low-interest loans to pay their loans off, as theirs was at very high rates (12% and 18% vs mine on 3%). I’m still paying this off, thankfully my salary is ok as I work in tech.
Still, though, I have to manage a lot of emergencies that come about, boilers, a car that dad has to use for work (I don’t need a car myself) that I had to buy for him as his broke down, and monthly shortcomings all the time. Sometimes I wish I could save up for a deposit for a place of my own but oh well. It’s the life I was born into.
| u/beigec
No easy money
Had a cousin who had delusions of being a finance guru — [he] would fly around the country to participate in mezzanine finance courses. [He] hit the jackpot when his builder friend required capital to finish a project and return him a sizable sum (I don't know exactly what).
[The] friend comes knocking on the door for more, yes you all know where this is heading. He ropes in his money, and his girlfriend's, I believe her sister contributed as well, but worst of all, got his retired parents to remortgage their beautiful Bondi home. I'm not sure how many millions this Ponzi scheme netted, but the parents had to sell their home, the girlfriend was close to losing hers [and] had to rent it out for two years to hold onto it. Silly man, always looking for easy money.
Gritted teeth
I have wanted to get Invisalign treatment (£3,000) since I wasn't eligible for NHS treatment, but I did that at the same time I left my previous full-time job working as a developer from home for a part-time job while I was studying for IT traineeship.
What I hadn't accounted for was that the part-time job only accounted for half of my full-time wage slip, but I still had full-time expenses going through. So now there was a wage shortfall and I was putting the shortfall on the credit card and a personal loan.
This lasted for six months and now I'm £6,100 in debt to two credit cards and a personal loan.
The good news is that I have managed to get a full-time job again as an IT technician and this week will be my first full-time wage slip packet in six months.
Multi-level missing money
So many MLMs ... so many ... and they never listen. It's like some kind of wall goes up. A coworker got fired and destroyed his marriage while trying to "make it" as some MLM stooge. To give you an idea of how bad it was, it was for long-distance cards to Hispanic countries in an era when cell phones were taking off and long-distance as a concept was evaporating. He lost tens of thousands.
Bitcoin chaos
[I] know a guy who got into Bitcoin crazy early (like he bought a ton of shares for pennies). Then Bitcoin exploded and at its peak, he basically had hundreds of thousands just there. He decided he was gonna wait cause it would only soar from there — it didn't [and] he still cashed out and made like 20k but compared to what he could have gotten. He doesn't like to talk about it.
[I also] know a guy who moved to grow his company (he was doing really well), bought a house and then shortly after decided to drop his old business and jump headfirst into a brand new one unrelated to anything he knew about [which led to] financial ruin. [He] owes a lot of dangerous people a lot of money and is about to lose the house. [He’s] one of the world's nicest guys but he really [messed] his life up.
A house divided
When my parents split up, my father didn’t want to leave the house, so my mother’s attorney convinced him to guarantee to give my mother half the value of the house AT THAT TIME whenever he sold it, and he could keep the rest. I still remember him telling me, “Housing prices only go up, I’ll come out of this way ahead, your mother is being foolish.”
This was five minutes before the big housing collapse of 2008. By the time he was finally forced to sell five years later his share was worth about a nickel after having to give my mom half of what the house had been worth five years before. I think about this every time he complains about not having any money, which is basically every time he talks to me.
Vaccinate or excommunicate
[This] guy worked for like 30 years at the company I was with and was set up with a great pension if he retired at a certain age. Like probably 5k a month in pension and he lives a relatively expensive lifestyle. [Then] COVID-19 happened and the government put out a notice saying there was a POTENTIAL that all federally regulated businesses (which we were part of) would need to get the vaccine to continue working.
He overreacted right off the bat and even though they didn't follow through with this policy, he still retired early at a huge reduction in pension. Could have been living comfortably for the rest of his life but now he is looking for construction jobs in his 50s because he can't make ends meet anymore. Jumped the gun for absolutely nothing. He was planning on retiring in two years but cut it short because he was mad about the vaccine.
That’s on you
[A man I knew] had $800 in his bank total, spent $784 on an Airbnb for a single night to throw a party for his birthday when the owner said no parties, lied to management at his job to throw it.
[He] got kicked out of the Airbnb in 30 minutes and fired from his job for lying. He was a gas station clerk. Couldn’t get a refund either.
“Bro I’m so broke, why does all this bad stuff always happen to me.”
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