When I was researching the Wantage Independent Advice Centre I spent some time with the advisors talking about debt management and it made me think.
I was brought up to believe that you should never buy anything that you can’t afford and when I was young credit cards didn’t exist and a loan meant a difficult conversation with a bank manager.
Now it’s much easier to get into debt and often harder to know that you’ve done it. I’ve never thought that the contract for my mobile phone was a debt but of course it is.
Paying off the total balance on a credit card may feel that it isn’t a debt but, for the time between buying that shopping in the supermarket and paying off the credit card, I have a loan from the credit card company. If I don’t pay it off the interest rate is horrendous.
It’s almost impossible to live in 2017 without getting into debt.
The biggest debt any of us are likely to have is a mortgage and, given house prices these days, that mortgage is going to be around for a long time.
There are also the student loans which anyone going to university can’t avoid.
Anyway I’ve just received the credit card bill from my holiday and decided it’s time to have a look at my finances.
I’m going to try and work out how much I spend and what I spend it on each month. I’m an accountant so you would think that this is something I do all the time, but it’s like watching my diet, it’s only when that favourite pair of trousers gets tight that I think about it.
So how much do I spend on regular bills and what are they for?
How much do I spend on clothes, and buying them in the sale doesn’t mean that they aren’t included.
How much do I spend on food, and can I separate essential food stuffs from eating out and bottles of wine?
Also how much do I spend on transport – this does include bus fares, taxis and the costs of running the car (not forgetting tax and insurance).
Should I have done this before I booked the holiday?
Yes of course I should. Now I just need to find the money to pay for it and that means making savings somewhere.
If this is something that you are worried about then the Wantage Independent Advice Centre may be able to offer advice.