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Dealing with Debt
Call me crazy. Tell me I expect too much. But please don’t tell me that taking 30 years to pay off £2000 of debt is a reasonable expectation. (Financial Mail 14th March 2004). But it appears that the credit card companies think it is.
I have to say the best case scenario did not exactly excite me either. With careful handling, one reader paid of £2000 in only 4 years. I admire his success. Four years is a huge improvement on 30. Well done! But this is still simply not good enough.
We are talking about £2000. Not £20,000 or even £10,000 but £2,000.
The same report tells us that “average debt is now a third higher than the average income for a year” Clearly, £20,000 is closer to the mark for most of us than £2,000. How did we get here? When did we learn to accept that it is ok to have low level debt that will take decades to repay? After all we are not talking about a mortgage. Even at £20,000, we are still talking about relatively small amounts of money. How did we become so conditioned to being in debt that we only ask for a better deal, or a lower interest rate, or more interesting introductory offers?
When did we stop asking, indeed have recent generations ever asked, “Do we need to be in debt at all?”
In 1997, at a wealth seminar I attended, I was encouraged to calculate the real amount of money I would pay on a mortgage that I had. I had a £19,000 to repay plus interest. I will never forget the moment I worked it out. I would pay £52,000 by the time the repayment was finished. This meant I would have to earn approximately £65,000 pre-tax to be able to hand over £52,000 for a purchase that cost me £19,000. To this day, I have never been able to see how that was fair? And to this day I have never been able to accept that this is the best we can expect for our financial lives.
Exepct More
The good news is that, since then, I have learned that we can expect much, much more. Debt need not be a fact of life. It need not take decades to pay off the debt you have. You do not need to have debt to have the things you want in life. The solution lies in simple mathematics and common sense, two subjects which have not been very trendy in recent years I know, but let's be honest, if I asked you to choose between a little common sense and a little practical mathematics or a lifetime of debt, which sounds easier? In reality, it is actually a lot of fun too. Why be dull?
Drop the Debt
Today we are launching Drop the Debt, an online programme with a very alternative approach to getting out of debt. This is like nothing you have seen before. It will give you what you need to get you out of debt and more importantly give you back your life and your peace of mind while you do so. It’s time to shake off those debt cobwebs and plan a financially fulfilling life. I am not promising instant freedom from debt. I am suggesting that you can repay your debt faster than you ever thought possible, that while you do so, you can still have a life and enjoy it more than you have in years.
Most importantly, I will show you how to use what you have learned from being in debt to your advantage in the future. If you thought that being in debt was all bad, think again. There is always something to be learned from all situations, no matter how awful they are, and being in debt is no exception. In fact, it could well be the best thing that ever happened to you.
Claire's Story
If it all sounds too good to be true, then don’t take my word for it. Read this story from one of my clients, a professional 30 something. I want to applaud her for having the courage to speak out. Debt is a shame that is often carried in secret and her courage resonates in the elegance of her simple honesty. Thank you Claire.
Grainne O'Malley
