Who is responsible for our debt?

Ordinary_Joe

Trouble is it is normal to have a credit card for purchases. I know we can blame adverts and banks for making it easy but the ads do indicate that terms & conditioons apply to illustrate there are consequences to the debt. Because we sleepwalk into debt we don't actually check whether we can pay the price of the debt.

For me the key here is choice. Whatever we say we have a choice and so often with debt we make the wrong choice. Partly because we let the "but I need it" override the "I don't really need it and if I walk away from it I won't ultimately miss it". We too often go for short term ease and gratification.

I'm trying to turn this thing on it's head and work out what I actually need to bring in to afford the lifestyle I want and then work out how to achieve that

fivemice

"Trouble is it is normal to have a credit card for purchases"
It shouldn't be though, should it? Surely we should only have credit cards for emergencies and pay for everything with available funds, having saved up for it?

Ordinary_Joe

fivemice wrote:

"Trouble is it is normal to have a credit card for purchases"
It shouldn't be though, should it? Surely we should only have credit cards for emergencies and pay for everything with available funds, having saved up for it?

I agree it shouldn't be normal. Except to use it to buy you 50 days interest free and pay the balance each month. Make sure it costs them to have you on board;)

So much of what we buy is based on the idea we need these things but usually we end up buying needless tat

I keep harping on about the rich dad book but his view is very simple - don't buy something until you get an asset to pay for it. Otherwise you've just acquired a liability that will drain your money away

I'mcomingbackasaman

IMO as long as I have a roof over my head and can pay all that this entails, enough food, water and clothing all the rest are materialistic needs. No use blaming peer pressure, advertising, newspapers, etc., you just have to say to yourself "Do I need this purchase, and can I afford it within my budget? Sometimes my willpower wins, sometimes it's outvoted hence my possession of a credit card, but I would NEVER get out of my depth that I couldn't afford to make payments and have the bailiffs banging at the door. If you don't like the adverts on the t.v. pushing credit at you, simply turn to the other channel or switch the tv. off.
'Money doesn't buy you happiness' as I'm sure most of you have realised.

Kevicho

Ordinary_Joe wrote:

I keep harping on about the rich dad book but his view is very simple - don't buy something until you get an asset to pay for it. Otherwise you've just acquired a liability that will drain your money away

Id keep on harping about them because they are a brilliant way to spend an hour a day

Im currently halfway through choose to be rich, some very interesting points (im currently in the S sector but i want to get into the B & I sector when i clear this debt), B is already in the works as well

I'mcomingbackasaman

Who is the author of this book you're talking about, Rich Dad please.

heppy23

I'mcomingbackasaman wrote:

Who is the author of this book you're talking about, Rich Dad please.

Someone called Robert T. Kiyosaki

I've only read the "main" book but it's very good.

heppy23

Ordinary_Joe wrote:

Trouble is it is normal to have a credit card for purchases.

I disagree. It is harder to NOT have a credit card for purchases. Society is orientated to the convenience of swiping bits of plastic to move money around.

I am going plastic free. I have gone from a credit card, a debit card and a cashpoint card to one cashpoint card.

Credit and debit cards make it too easy to spend money.

In theory I could go "plastic-less" as I now bank in the town where I live and I can go and withdraw money over the counter 4 days a week.
It would mean I would have to plan better and do stuff like keeping an emergency £20 note in the car for petrol.

fivemice

I recognise that book title, I think he has a few in a similar vein doesn't he? They all live happily on the bookshelf of my accountant FIL!

I admit, to me a CC was for needless treats, things you want and can't afford. Somebody must have put that idea in my head, and it definitely wasn't my parents. I think it may have been a close friend who was a year old than me, but I should have learnt from his debt troubles. Advertising doesn't help either.

But it was ultimately my responsibility.

robertbruce

Hi

My debt will disappear soon, and a few new rules about the way I work will prevent the SAME version of that debt from recurring. Unfortunately, there are other players in the game of life who are constantly reviewing THEIR methods, eg banks work out how to get money from me on debit card charges when I have cancelled all credit cards... also governments (all parties) work out new ways to get tax income from me after I have learned the rules and legally avoided as much as I possibly can.

As these others evolve, so must I evolve and LEARN THE NEW RULES. Where are the cheaper options for buying necessities... see Martins tips
Where are the savings to be made on lifestyle changes... see Martins tips
Where is my increase in income going to come from... unfortunately, as a self-employed businessman, Martin doesnt really help here (in fact I've had to be careful he is not actually against me in any of my attempts to make an honest living... its a very fine line sometimes)

Luckily, the more honest a business, the better it does, so that is why I feel I will always succedd eventually... and i dont need to look over my shoulder when doing things honestly.

Crooks on the other hand dont have any restrictions on how they operate, so it is tougher to operate within the rules... and even more essential that you LEARN ALL THE RULES to maximise your use of them in your incomes and outgoings.

LEARN ABOUT BENEFITS as many people are entitled to get help but dont always get the full amount because they dont understand the system.

LEARN ABOUT BUSINESS and understand how it operates. For example, knowing the profit mark-up in a given shop will help you understand why it CAN or CAN'T offer you a discount you have asked for.

If all this daily lifestyle stuff is about learning, then it is ESSENTIAL that it is taught in secondary schools, colleges and universities BEFORE people commit to debts. Everyone should learn the basics about CREDIT, DEBT, MORTGAGE, and most importantly INCOME MAXIMISATION.

Get the income right, and the debts will become more manageable. It really is important that people grasp this, no matter what level of income we are talking about... find out how to maximise it.

Best of luck to all in the fight against debt.