Are you losing it?
Financial control is hard to maintain. Are you losing it?
During my legal career, I have worked in two very different environments - a commercial law firm in the City of London and a free legal advice Centre in Cardiff. It’s interesting that in both of these work places, I have been surrounded by people who are in debt. This has taught me that debt is no respecter of income. Most people spend about ten per cent more than they earn, and it doesn’t take a financial advisor to realize that this is unsustainable in the long term.
Here are some indicators that we may not have a firm grip on our finances. Do any of them ring true with you?
- You have no idea how much your total debts are
- You don’t know what interest rate you are paying on your debts
- You regularly spend more than you earn
- You rarely open bank statements
- You are always overdrawn
- You do not know what standing orders and direct debits are set up on your account
- You make the minimum payments on your credit cards
- You put off paying bills until you receive reminder letters
If you feel that your finances are a bit out of control, here are some strategies that may help.
- Make a budget and stick to it – vehemently! Note down how much you spend and what you spend it on. You will start to see where your money goes each month.
- Avoid using credit cards and try just using cash for a while – it hurts more to part with our hard earned cash than it does to pay by plastic! You can’t always buy exactly what you want when you want, as you will not always have sufficient cash to hand. But, I guarantee you will spend less, which means you can save more.
- Attack your credit cards! Pay more than the minimum amount each month. Target the cards with the highest rate of interest first.
- If you have equity in your home, don’t borrow against it unnecessarily - your home is your biggest and most valuable asset. If you can’t keep up payments on a mortgage, then your home may be repossessed.
- Prioritise your debts – failing to pay certain debts is more serious than failing to pay others! The most important debts may not be the largest and might not be shouting the loudest. So, seek advice about which debts you should focus on.
Don’t carry the burden of debt by yourself – you’re not alone!
Speak to a friend or family member and make an appointment at your local advice centre.
Katie Clarke’s new book, ‘The Sixty Minute Debt Buster’, is available now from the Care for the Family shop.
Written by Katie Clarke.
Digg it
Reddit
Delicious
Stumble It!
Furl it
