While the card companies minimum payments would see a debt disappear over a 30 year period (provided you didn’t add to it) ,with careful handling one reader paid off £2000 in just 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” So 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?”

Some time ago, 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 left 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.

Expect 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

Drop the Debt, is 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. In the meantime here are some tips to get you thinking about the issue of debt.

Five Top Tips For Rethinking Debt

1. Count The Cost

Total the amount of money you currently pay each month to repay debt. Realise that this is money you are paying for something that is already in the past.

It is not just another monthly expense. It is money you could be putting to better use for your present and your future. Multiply it by 12 to get a yearly figure. Know that this is money you earned this year but which you already spent last year and before.

Think about that.

2. Count The Real Cost

What are you giving up to have debt? If you had that repayment money in your hand, what could it buy for you this month? What could you have if you didn’t have to make this payment to the credit companies, perhaps a holiday or extended time off work, or a course you’d like to do?

Make a list of the things that you would like to have in your life which you cannot afford because of your current debt repayments but which the total of your current debt repayments could pay for.

3. Borrowing Today Is Stealing From Tomorrow

The monthly amount you pay towards debt today could be money you invest for your future.

For example, let’s say your monthly debt repayments are £200. If you did not have debt and you had £200 to invest monthly and it earned 10% annually, over 30 years you would have just under half a million pounds.

So if at 20 years old you got yourself a good investment account, (instead of say, getting yourself a store card), at 50 you could retire comfortably. After all, you are putting aside the £200 a month anyway so why not put it aside somewhere it will grow instead of throwing it into hole that seems never to get filled.

4. Imagine

With money taken care of, imagine how 30 years could pass differently for you. You might well still be working and doing all the things you are currently doing but instead of doing them with a struggle, you would be doing them with the security of knowing that your future is taken care of.

You would know when and how you could retire, AND you would get to live your life without fear and shame and stress of debt.

5. Make Poverty History

I know that you are the kind of person who would like to do give generously for the starving millions in our world.

But it’s not easy to keep on giving when it’s tough to make ends meet at home. Look again at the total of your monthly debt repayments. Take just £20 of that total. If you did not have to pay that £20 to debt, you could pledge it to change the world. You would never notice it but just £20 a month could support another whole life in a poorer part of the world.

One person saving the life of one person, Making Poverty History one person at a time.

It’s frustrating for both of us.

I could fill my practice with clients who can’t pay – but I wouldn’t be practicing very long if I did that. One of the most  important reasons we all write at FionaHarrold.com is to provide inspiration to anyone who is not in a position to hire a coach.

Dealing with money, dealing with life

The subject of money is a thorny one though and how we each deal with it can be enormously revealing about how we deal with ourselves and our life. If we’re honest with ourselves, feeling unable to afford to hire a coach can sometimes point to underlying things:

• I don’t value myself sufficiently to spend my money on hiring a coach to help me
• There are more important things to spend my money on
• I’m not prepared to stop spending my money on ‘x’ and save up so I can spend it on a coach instead

And sometimes, it can actually be a welcome smokescreen for the fact that we don’t really want to change our lives. Maybe it’s simply not our true priority.

Desperate to change

HOWEVER, what if you DO want to change your life but in all honesty you cannot afford a coach? What if you are desperate to leave your job but you simply cannot afford to resign tomorrow?

What if, for instance, you’re a single parent and the sole breadwinner and your job pays the bills but nothing else? What if you feel trapped by your job because you hunger for something more but you can’t put your finger on what that ‘something’ is – how, you might ask, does a person like you find what they are meant to do; where do you start?

Right here!

1. Read. Voraciously!

There are hundreds of excellent books to help you. Look at Fiona’s recommendations on this site. Browse the bookshops, browse online at amazon.co.uk. And then pay a visit to your local library. You can get an incredible selection of books for free. If you want a book that your library doesn’t have, ask them if they can order it for you. If you don’t know what you want to do, SEEK. Seek information to begin with, expand your horizons about what’s out there.

2. Ask for what you need

Don’t assume coaching is out of your reach – many coaches are willing to offer a sliding scale of payments if you ask them, and group workshops make an affordable introduction to coaching. Don’t think of a workshop as one afternoon of high-octane motivation which will fade – good workshops generally provide you with enough material to continue with an action plan for the next few months.

3. Look out for low-cost opportunities

Investigate the growing number of opportunities that now exist for free training and advice. If you’re not sure what you want, or you don’t feel you have enough qualifications, finding out about and learning new things is a superb way to move forward.

Again, check out your local library for information, or pay a visit to your local job centre. Keep your eyes open for exhibitions you could go to about subjects that interest you. Look into Business Link if you’re dreaming about setting up your own business. Explore low-cost options like evening classes or distance learning or Learn Direct courses where you may be eligible for discounted fees.

Be a sleuth and track down the wealth of options open to you they really are out there! If you’re interested in writing, investigate correspondence courses that guarantee to give you your money back if you’ve not earned the course fee through your writing by the end of the course.

Unemployed? A couple of years ago I had a client in her 30s who found that because she was unemployed she could do college diplomas for absolutely free. A year later she was a fully qualified holistic therapist and sports masseur running her own business from home.

4. Buddy up!

Buddy up with a friend who’d like to do some personal development work. Work through your books or courses together, (Reinvent Your Career could be a good start!) and be a coach for each other. Agree these two fundamental ground rules first that you will each focus on the other, and give equal time to each other.

5. Stay tuned in

Tune in to all sources of information about other jobs. Counter any feelings of helplessness and paralysis and feeling a victim – by taking control and taking action. Find out what jobs are out there.

Make a point of reading the job pages in local and national papers regularly for ideas. Find out what other people do, find out what their sisters and brothers do, their mums and dads their(you get the picture). Talk to recruitment agencies about the sort of jobs on their books. Investigate company websites.

Go to networking meetings for small businesses and, if you’re female, the local women’s network. Attend exhibitions. Go to job fairs. BE ATTENTIVE to every opportunity to hear about jobs one just might ‘click’ for you. Seek and you WILL find!

If you don’t want to be caught in that spiral then take charge of your finances now – don’t wait until the New Year. Get started with your Christmas spending – after all this is the most expensive time of the year for most people.

My five-step plan below will help you to ensure you don’t go overboard this year, but DO still have a fab Christmas.

1. Make a plan

Sit down with a nice glass (or mug) of something, put on some great Christmas music, and make a list.

Decide what you want to spend and include a couple of ”spare” presents for those last minute guests. Resolve now not to exceed this amount. In fact, why not challenge yourself to come in under your budget, and have a treat for you too!

2. Avoid the High Street

On-line shopping is great. You can buy pretty much anything these days, and have it delivered to your home or office.

It’s easy, convenient, low stress – and you are less likely to get seduced into spending more money by glitzy shop displays, and oh so helpful assistants.

Did you know you could even do your bit for charity at the same time, by accessing your favourite shopping sites via a portal like www.giveortake.com? Check it out.

3. If you do hit the high street, use cash, and leave your cards at home

All the research shows it is psychologically far easier to over-spend using cards.

It’s easy to get carried away and start taking advantage of all those 3 for 2 specials… even when you only want one of them.

It’s much more real when you have to hand over your hard earned £20 notes, so do yourself a favour and take out only the amount you have budgeted.

4. Avoid leaving your shopping until the last minute

That’s when you get into panic mode, and start chucking more and more money away. You do not want to be in Selfridges (or any other shop) on Christmas Eve – you want to be relaxing and oozing Christmas spirit.

Do it now. Then you can relax and have fun with the wrapping, not to mention enjoying that smug feeling of knowing you’ve done it all.

5. Think laterally

Be creative – can you  buy something different from the run of the mill?

Have a look at farmers markets, garden centres, local activity centres,   charity catalogues – do you know someone who’d like a herd of goats for Christmas, or a star named after them? What about a day bellboating?

How about a theme this year, eg. everyone gets something foodie, or buy the same present for most people on your list – there’s no rule saying they all have to be different.

And finally – keep your receipts! Have you stayed within budget? Well done you.

Add everything up (gulp!). Now take the full amount, divide it by 11, and resolve to put that amount into your Christmas account as soon you get paid each month. That way, you’ll have next year sewn up too…

Happy Christmas!

A combination of taking time off to have a family, spiralling lifestyle costs, a higher cost of working (think clothes and grooming), lower earnings, working in lower income industries and most importantly having lower earning expectation and lower financial confidence have all contributed to financial circumstances that do not support our dreams and desires.

Having been at the receiving end of these latent (and blatant) circumstances and prejudices myself at one time or another, I was determined to do something about it. Working with my Chartered Accountant/Coach husband, I developed a programme specifically designed to bridge the gap between the financial confidence that men exude (including some notable women) and the financial confusion that holds women back.

Turns out the gap is like one of those mirrors in the fairground; the one that makes tiny things look huge. It only looks large until you turn round and face it. Bridging the gap can be so easy. It can be fast, effective and even fun!

Money problems – a private shame

Recently the national papers have been bringing lots of financial bogeymen to light…spiralling consumer debt, the collapse of pension funds and under performing endowment plans, an ageing population, increased taxes and a failing national health system needing to be propped up by private medical care to mention a few. It might all sound scary but I for one am pleased that these subjects are being brought to public attention. We talk about the detail of our sex lives more readily than we discuss our money problems.

This private shame is keeping so many people locked in ever worsening financial circumstances, keeping up appearances while fear eats away at their future. Women across the UK are struggling in silence to keep up appearances.

It’s an unhealthy combination; a financial system of increasing complexity and an uninformed individual scared to say they are out of their depth. Here’s the best kept secret of all time.

Women are better with money than men.

Not my opinion but that of Charles Mellon, multi-millionaire investor, author and lecturer on stock market trading. We owe it to ourselves (and our daughters) to learn to use our innate financial skills.

Meanwhile read my top 5 tips for money management and start putting them into practice today!

Top Tips for Money Management

1.The Fab Four

There are four pieces of financial information that you must know as intimately as you know your bra size.

• Your exact monthly income
• Your exact monthly expenditure
• The exact amount of your debt
• Exactly how much money you have left over at the end of the month (or not)

These four numbers impact your future financial decision making more than any other piece of information or education you could ever have. If you do nothing else, find out these numbers. Once you know them they will guide you in the right direction.

2.Talk, Talk, Talk.

It’s supposed to be what we do best so lets put it to the best use. Let’s get this stuff out in the open.

One client explained to me that any subject was acceptable at her parents table while growing up, from sex, to politics to religion to you name it. Except money. Money was not considered polite conversation and certainly not in front of others. You will be astonished to find out how many people who appear financially stable are experiencing financial problems. From where to find the cheapest toilet paper to how to get out of debt, your answers could well be in your own circle of family and friends.

3.Read, Listen and Learn

Whatever your buzz; books, tapes, CDs courses or seminars, begin your own financial education.

Read the financial section of the paper. It might start out being dull and maybe even double Dutch to you. But you’ll become familiar with the language and it will provoke questions you will want answers to for your own financial life. There are many many sources of information available. Make a decision to learn about you and money.

4.Christmas is coming and the credit card companies are getting fat.

As a nation we run up an astonishing percentage of our annual debt in the holiday period. This holiday season do your family and friends a favour. Be the one that suggests that you are all reasonable with your gift expectations. Calculate how much you can spend without using credit and stick to it.

Trust me, a Christmas bought and paid for in cash is a much different one than one provided by increasing debt. Try it and then tell me how it was for you.

5.Take one big giant step backwards

Go on! Stand up and step back now. Did I mention that Christmas is coming up? Let me mention it again. Christmas is coming. Prepare to be bombarded with “Pressure to Purchase”. Everyone and everything from the neighbour with the Santa circus in the garden, to the media and advertising, to little Johnny begging for the latest gadget, to that cute bearded old man in red at the shopping center is going to tell you what you need to buy.

Every time you see one of them coming, every time you reach for your purse I want you to take a big giant step backwards away from them and ask yourself if it is you or them that is making the decision.

Dear Fiona,

My wife and I have been married for 3 years now and we’ve both decided that we’re ready (mentally not financially) to start a family. My wife will not return to work after having children as she’s always wanted to be a full-time mum and I fully support her decision.

Our main concern is that we will lose her salary and we have no substantial savings to fall back on.

We’ve become quite accustomed to living on a fairly decent joint salary and whilst we know we can’t maintain the lifestyle we’ve been used to I’m concerned that I alone, sometime soon in the future, will have to feed more than 2 mouths. Can you suggest any lifestyle changes, clever budgeting ideas that may help me in the future.

Matt, 38

Fiona Replies:

Hi Matt,

Congratulations on your forward thinking. It’s really quite unusual to see someone planning for such a life-changing event as having a baby. So, you’re way ahead from the start.

It’s worth bearing in mind that plan as you might, there’s no guarantee that your wife will continue to want to be a stay-at-home mum just because it feels right now. But it’s great to plan to have that choice rather than feel forced back to work.

Call me immature but I think it’s far more exciting to think about ways of making money rather than ways to make do with less. It brings out our creative side.

Let’s think about that first off:

1. Assess your worth

Your most valuable asset, in terms of cash flow, is your ‘earning ability.’ You could lose everything you own – your house, your car, your job, your bank account – but as long as you still had your earning ability, you could make it all back and more. Take stock of your unique talents and abilities.

Your job is to identify your special areas of uniqueness and then to commit yourself to becoming very, very good in those areas. What is it that you do especially well? What are you good at? What do you do easily and well that is difficult for other people?

2. Money-making opportunities are everywhere

Necessity focuses the mind and gets the creative juices flowing more than comfort and coasting along. Now is the time to get thinking about turning some of yours and your wife’s combined wisdom and ‘earning ability’ into a money-making idea, in addition to your salaried jobs.

This can be a joint project that you research and begin now in your spare time that can be managed and monitored without too much hands-on involvement and gives you both the flexibility to do as little or as much as you want, and generates extra income.

This could be anything from a cleaning company, dog-walking agency, book-keeping service, whatever you can set up easily, imaginatively and can be run from home and in the evenings.

3. Plan for two pay rises!

Now that you’re aware of your stock and its value, figure out how can you offer additional benefits to your company in order to get not one, but two promotions and pay rises in as short a time as possible. Think about adding to their bottom line so that your increase is entirely and easily justified.

This is the time to get ambitious and move up that ladder two rungs at a time. You’re a young man with the incentive and wherewithal to get ahead.

4. Where does your money go?

Calculate EXACTLY what your monthly expenditure is. Begin with your direct debits; add your utilities, then your groceries, toiletries, eating out and socialising. Then take your big annual bills such as your car insurance, Christmas or holidays and divide them by 12 and add them in. List EVERYTHING. Overestimate if you are not sure. Knowing what you spend and how you spend per month is one of the most useful pieces of information you can have.

Decide where you can cut costs painlessly, leaving less of a shortfall for you to make up without your wife’s salary.

5. Curb your consumerism

Retail therapy offers a quick fix, a shot of euphoria that is over all too soon. The culture of earning more to spend more just doesn’t add up. And buying more stuff to store, tidy and take care of  adds to the chores. Some of the most stressed people I’ve come across are folk whose wealth has cluttered their lives with too much stuff to watch over, protect and insure.

A simpler, pared-down life is much more refined and desirable. Think before you buy. Do you really need it or really want it or are you being persuaded that you do? Watch your motivation. Resist splurging to cheer yourself up or enhance your status. You don’t need things to tell you who you are or impress others, though some of the cleverest ad men in the world will disagree!  Buy less and buy better.

A connoisseur doesn’t surround himself with masses of cheap tatt from third-world sweatshops, but carefully chosen objects that he cherishes and passes on to the next generation.

This article was first published in The Independent On Sunday newspaper

As you get ready to unwind at the end of a long year and put money problems on hold until January, the last thing you want to listen to in November is someone telling you to be careful, watch what you spend and have an affordable Christmas.

Bah! Humbug to that!

I want you to have the best Christmas you ever had. I want you to wake up on Christmas morning feeling a warm fuzzy glow with nothing to worry about, all your family around you, everyone in great mood and lots of presents under the tree. I want you to have a marvellous feast and drop off into a snooze after dinner.

I want you, this year, to finally have that truly peaceful, happy Christmas you have always dreamed of.

How was this year?

How much of what you wanted this year did you not get because you have spent money you did not have and have to pay it back? What will you not get next year because of debt?

When did it start happening that we had to choose between a Merry Christmas OR a Happy New Year?

I told you I wished you the best Christmas you could imagine. Hand on my heart, I honestly do. I am sickened that the money problems in our society demand our attention at a time when all we really want is to have some fun, relax a little and give gifts selflessly to express to people how much we love them.

Christmas is a time when we buy that X Box just to see a child’s face light up whether or not we have the money. Emotion wins over logic and it should.

But the best Christmas, take it from one who knows, is one that is paid for in cash, one that does not suck the breath from your New Year and a new chance to begin to live the life you really want.

Just in case you are interested in making a head start on turning your finances around next year, here are my Top Tips for minimising the financial impact of this Christmas.

Five Tips for Minimising the Financial Impact of Christmas

1. Write a letter to Santa

“Dear Santa, I’m writing to tell you what I want for Christmas. I’ve been very good all year and I deserve ….”

Now describe your perfect Christmas holiday, who is there, what are you doing, what did you have for dinner, what presents did you get, what did you give. How much did it cost you, how you feel in January having had the perfect Christmas and still having money left over?

2. Making a list and check it twice

I am sure you have often heard that if you go to the supermarket with a prepared list you will buy less, spend less and get more of what you really wanted than if don’t prepare a list. It’s the same for Christmas. Write a list and stick to it. Of course this is only useful if you also……….

3. Stay within your budget

First you have to know what your budget is!

Christmas is only one day. The holiday period is 10 days to 2 weeks. But I recommend that your Christmas budget covers 1st November to 31st January, a full three-month period.

Write it out, how much you have coming in, how much your normal household bills are, the bills that will be due in January and THEN, what you plan to spend for Christmas divided into presents, food, entertaining/socialising etc. Then commit to stick to it, forget about it and have fun.

4. All things bright and beautiful

“Advertising may be described as the science of arresting the human intelligence long enough to get money from it.”
Unknown

Get between you and the advertising. Make your own plans for your money first. When you have a plan, it’s like there is a bubble of protection between you and outside pressure, especially between you and advertising.

It’s like someone turns the sound down and you can hear your own voice of common sense above the Christmas Bells, above the advertising jingles and above the clamour of your own emotions.

5. Give yourself the gift of a course in managing your finances.

At the risk of appearing to join those that want to separate you from your hard-earned cash, I strongly encourage you to begin planning for your next Christmas now.

Right now if you are deep in a difficult financial situation without a plan, commit to making this the last year you feel overwhelmed by external pressures on your finances. Buy yourself something, a book, a programme, a financial coaching course, buy anything, but do something now.

Merry Christmas AND a Happy New Year.