How much do you owe? 

Do you know the exact figure or a rough guess?  Do you avoid adding it up. Does it hurt your head? 

If you’re like me, owing anyone any amount of money feels like a noose around your neck.  But somehow we’ve been conditioned by society that owing money to a Bank or Financial Institution is ok.  Why is that? 

I used to be the kind of person that used my credit card for everything.  My salary would go into one account but I’d use my Credit Card for most spending & then pay it off each month.  It would clear down to zero, so technically I wasn’t paying interest on it. 

But … then came the new iphone or camera (I’m a tech nerd) and suddenly the wheels start turning … “what if I used the credit card & paid it off each month like other people do”.  I can have what I want now rather than waiting until I have the money & theoretically it’ll only take me xx months to pay it off.  Thats way less hassle than getting a loan out. 

Besides … you deserve it, you’ve been so good with your money.  Its a little treat!  (Just like that chocolate cake after having been on a diet the whole week!). 

But then life happens.  That little twist of fate.  

The fridge breaks down or a pandemic strikes.  Now you’re battling to pay off the credit card.   Hopefully you have an emergency fund to help buy a new fridge … if not you’re leaning on that credit card again & we all know how high the interest is on those things. 

Calculate your debt

I suggest you get a paper & pen out & write down how much debt you have.  Face up to it.  Then make a plan on how you’re going to clear it.  

How much do you owe in your :

  • Overdraft
  • Credit Card
  • Student / Educational Loans
  • Car Loan
  • Mortgage
  • Any other Bank / Savings Acc/ Credit Union loans

Do you know the interest rate on each of these?  How much the minimum payment is & when you’ll finally clear the debt?  

I got a fright when I looked at my ‘small’ credit card bill only to see a note on the last page saying “if you pay the minimum payment your debt will be cleared by 2030”.

2030????  10 Years to pay off a small credit card debt.  Thats crazy.  But then I realised at 16% interest, I’m paying more in interest than in purchases.

I strongly encourage you to look at your Debt Number.  Its an eye opener. 

Awareness is the 1st step to change