Ten Tips To Stay Free From Debt

Posted at 01:56am on 16th September 2008

Revised: 10th December, 2009

The article that follows was written more than a year ago, when the true story of global recession was only beginning to unfold. Now, nearly fifteen months later, governments of all nationalities face unprecedented levels of indebtedness. And levels of unemployment, we’re told, are still set to rise. If you are one of the millions who face a drop in income and a squeeze on your finances, read on. These ten tips are designed to help you stay debt free.

15th September, 2008

PERSONAL DEBT & NATIONAL BANKRUPTCY

It is exactly twenty years (February 1988, to be precise) since I had two articles published on debt, one titled simply Debt, the other, In Bondage to Borrowing. At that time, the newspapers spoke of record sales and predicted that as a nation we were heading for bankruptcy. Figures for the end of 1986 showed that Government statistics estimated the global sum owed by UK residents to be a ‘staggering’ £30million, compared to £5million in 1976.

Today that figure has risen to £1.6trillion – an eye-watering increase. Yet the number of cases of personal debt coming to court in 1988 was put at ‘nearly half a million’, whereas in 2007, only 106,645 people were declared insolvent in England and Wales. Clearly the method of dealing with indebtedness has changed. We’ll return to this subject at a later date.

In the wake of today’s collapse of Lehman Brothers, the largest investment bank in the US, the possible loss of 40,000 jobs in the bank’s European Headquarters in Canary Wharf, and the global financial ramifications of the crisis, my articles seem to be a timely reminder. So I’ve decided, today, to write a mini series of posts on the subject of personal debt: debt support, and credit card debt elimination.

SAVINGS ACCOUNT

In one of my articles, I wrote about my first purchase as a child. It was a doll, and my sister helped me to save the required amount, as I had done previously for her. We knew nothing of joint savings accounts or offshore savings accounts, and an e saving account was sum’at a Yorkshire lass might ‘ave. But we were given lockable metal penny-boxes, and we were encouraged to use a Post Office savings account.

My sister’s doll drank and wet its nappy; mine had ‘real skin’ and was a life-sized baby doll. The saving for each took us over a year, and included our 6d a week pocket money, all that we could make on collecting and selling bundles of old newspapers for recycling, and the vast sums which were to be found in the door-to-door vending of windfall apples collected in our garden. Thus we were introduced to the real world, and to our own latent talents as entrepreneurs.

All that was left of my doll when my children reached their primary school years, was the life-sized head, formed of more durable material than the ‘real skin’ body, but the memories of many hours of pleasure spent playing with my doll are indestructible. That doll was more precious to me than anything. Certainly, for my sister and me, half the pleasure of our purchases was in the anticipation, and the endless counting of our savings until we reached the required amount.

Today’s motto is to ‘take the waiting out of wanting’, but I can’t help wondering if it doesn’t also take the ‘pleasure out of possessing’. As Robert Louis Stevenson (author of Alice in Wonderland ) said: To travel hopefully is a better thing than to arrive, and the true success is to labour.’

BORROWING ON CREDIT

When every postal delivery seems to contain at least one invitation for ‘easy, risk free’ borrowing, that axiom has been turned on its head. But as many have discovered, to their cost, whilst borrowing to fund consumer spending may be easy, repayment is hard. There are those whose repayments from last Christmas all but overlap with the purchases for next. There can be little pleasure in knowing that you’re on a treadmill from which there appears to be no escape. So as the season of goodwill approaches, what can you do to stay free from debt?

DEBT RESCUE

  1. Write to credit companies telling them to lower your borrowing limit.
  2. Cut up, or return, all credit cards.
  3. If that’s too drastic, close all your credit accounts, bar one.
  4. And if that’s still too drastic, cut down to two.
  5. With two cards, you can split your Christmas spending, paying one balance off in full (thus avoiding payment of any interest) and dividing the total of the second card into three payments.
  6. Avoid temptation by staying away from the shops.
  7. Leave your cheque book and credit cards behind if you do go.
  8. Keep your computer in the living room in full view of the family so you can’t be tempted to shop-online in secret.
  9. Return all mail-order catalogues, unopened.
  10. At the same time, write telling them to take your name off their mailing list.

10th December, 2009

FREE FROM DEBT

Some of the measures in last year’s article may seem somewhat yesteryear, but they work. With the British Prime Minister’s promise of ‘No more boom and bust’ ringing hollow in our ears, we face unprecedented levels of national indebtedness. But if £175 billion pounds is beyond our comprehension, there are other, more personal, factors to consider. In view of the forecast for an increase in inflation in 2010, the return to 17.5% in VAT, and a hike in tax and National Insurance, perhaps a return to old fashioned values is what we need. To re-coin an old-fashioned phrase: A little waiting for what we want might make the heart grow fonder.

Make 2010 the year you become free from debt. It only takes a little determination and you can be at peace with yourself. So follow the steps above, and take a look at these ten tips to get rid of debt, and find out which government agencies and charitable organisations may be able to help you. Good luck.

This article may be reproduced on any non-commercial website or blog on condition that it appears unaltered, in its entirety, and that the following by-line is prominently displayed beneath it.

Author of a number of books, one a No 4 Bestseller, Mel Menzies is also an experienced Speaker at live events, as well as on Radio and TV. www.melmenzies.co.uk USED BY PERMISSION

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