DOING THINGS DIFFERENTLY: Not ‘right’ or ‘wrong’, just different!

Staying out of Debt

I have never had a credit card. I know there are pro’s and con’s to this, but I was brought up to believe that getting into debt was a bad idea, and I have stuck firmly to this principle ever since. I do have a debit card, but I am okay with that because I am careful not to get overdrawn in my bank account.

I can’t say, though, that I have never owed any money because I did have a mortgage when I bought my first house. Fortunately it was only a small one, because I had been able to save quite a large deposit during my teaching job. My husband and I found a house we liked in the seaside town of Brighton, UK, and trotted along to the local building society – one of a large chain.

To our astonishment, when the clerk looked at our joint incomes and professions and saw the house we wished to buy, he turned us down saying, ‘We think you can do better than that.’ My husband and I looked at each other in total incomprehension. It slowly dawned on me that they wanted us to get a bigger house in a more salubrious neighbourhood, just so that they could saddle us with a bigger mortgage and get more money out of us over a longer period! My first life lesson in the debt economy.

Fortunately we stuck to our choice and managed to find a small local building society to lend us the few thousand pounds we needed to buy the house. It served us well for a decade but then, after divorce, I decided I wanted to move right away from Brighton. It was then that I think I made the best financial decision of my life.

Most people seem to think they should ‘upsize’ when they buy a home, except towards the end of their life when they need to ‘downsize.’ Well, I downsized in my late thirties. I moved to a smaller house in a less expensive area and paid off my mortgage in full. Years later I did the same thing again, but this time I was able to buy a far bigger house because I moved from the South of England, where house prices are still artificially high, to the North, where house prices are much lower.

Living mortgage-free for so many years has enabled me to manage pretty well on a lower income, and I have no regrets about getting out of the debt economy all those years ago. My only fear is that if and when the economy implodes again, everyone else’s debts may be wiped clean – but so will my savings!