Spiral of Debt

carrieuk

Hi,

I have spent the last couple of months paying things off. I have paid off 1 credit card and half a store card.

This is where my brain kicks in and goes oooh you have free money... so i go out and buy a new car on finance and tell myself it was a good deal as it was 0% interest and i'm going to keep the car forever... except i'm not... i give it 5 years max.

So now I am back to square one.

A lot of debt and low payments... argh

I just need to break this cycle...

jackieblack

Ok
So what would you LIKE to be doing with your money instead of making loan payments?

We love our holidays, our household income is quite low (compared with national average, our household income is barely equal to the average individual income) but we live frugally so we can manage one or two trips to the USA every year.
Whenever we're tempted to spend money we think what would we rather have, this shiny new thing or put that money towards our next trip.


It's a question of focus and priorities. Thinking financial decisions through and not just buying without thinking through the consequences. Focus on the thing you'd like to have/do if you weren't paying off loans/credit cards etc


Martin's Money Mantra is a good one, http://blog.moneysavingexpert.com/2010/10/12/money-mantras-never-leave-home-without-them/


and some good 'stop spending' tips here http://www.moneysavingexpert.com/family/stop-spending-budgeting-tool

longtermplanner

The next time you have 'free money' you need to set up a STO for at least half of it into some rather tricky to access savings account. Pay yourself first!