Sylviawh.co.uk Blog

What is the worst trap that almost everyone falls into?  Cards of course, credit cards, store cards, and even your debit cards if you have overdrafts allowed.

The main problem with cards is that it is so easy to spend money and to keep spending money, because once you reach your limit it is so easy to apply for a new credit card, or to move to a different store and open another account.

You go shopping and there in the window you see a fab designer dress at a designer price, but that doesn’t stop you.  You rush in,  hand over your card and the designer dress is yours. It was so easy. 

But what if you didn’t have a credit card but had that amount in cash in your purse, would you have been just as happy to hand over your cash?

Its a strong bet that you wouldn’t unless you had gone out to buy a dress for a special occasion.

The problem with credit cards is that you don’t feel as if you are spending money so it is easy come easy go, until you get to the point where your monthly payments have overtaken your monthly salary.  You are now so deep in debt that you don’t know which way to turn.

The only way out is a debt management company which means lower payments but you are chained for the next few years repaying your debt. 

Was it worth it and would you do it again?

If you have not sunk too deep yet you have a chance to change the way you use your credit and store cards, that is if you have any sense.

House prices are still dropping which is good for the first time buyer but bad news for those selling their homes.  This is definately not the right time to put your house on the market unless you are forced to.

Of course you may find a bargain which will cover the loss you make on your own house, if so it may be worth proceeding if the house you are purchasing is in a better location or has other benefits to recommend it.

Your home is one of the most important, and expensive item you will ever buy, for this reason your mortgage is the first and most important debt you should repay every month no matter what the circumstances.   If it is beyond you due to loss of your job, or even more serious matters you should approach your lender immediately, do not wait untill you are in behind with your payments.

Explain your situation and find out if there is any way to lower your payments until your situation improves, or even if you can extend your mortgage to make a more managable payment.

Never bury your head in the sand and do nothing, the problem will not go away on its own. Search every avenue to find some way of easing the situation, and if that fails don’t get to the point where your home will be reposessed but place it on the market yourself in the hope of getting some equity out it.

I have seen this economic depression happen three times in my lifetime, and each time it has recovered house prices have shot up even higher than before. So if you are in the position to buy a home, now is the time purchase.

Just lately everything seems to be about saving money due to the economy.  There are so many ways to save money but many people seem to want to bury their heads in the sand and just hope it will go away.  That is not likely to happen for quite a while as when the upturn comes many people will be struggling for a long while after to pay off debts that occured during the recession.

The only way to try and beat the recession, or at least try and keep your head above water is to cut out all the luxuries.  For a start if you smoke then stop or cut your smoking in half.  If you like to go out for a drink, stay at home and brew your own or get into the wine making business, for your own or friends consumption of course.

Stop and check food prices, instead of those expensive cuts of meat look at cheaper options, and try out those own store brands instead of the top brands, most of them are just as good.

Check out those toilet tissues you buy, why buy the expensive ones when when stores own are a quarter of the price and do exactly the same job.

Forget about those expensive summer holidays for a while, for a start they cost twice as much when the children are on holiday from school, instead arrange a few days out to compensate and stem any disappointment.

These are only a few ways to cut costs there are many more if you look at your lifestyle, after all it won’t be for ever, but you never know you might get used to being frugal and when the good times come think how bank balance will climb.

For some reason it is drummed into us buy fresh vegetables. 

In this day and age most moms are working moms, so coming home from work and having to prepare fresh vegetable is tiring and time consuming.

With the kids clamouring for their dinner, mom is inclined to forget about healthy and nutritous meals and serve up the old favourites like chips, burgers, fish fingers etc.  All the easy options that we must admit the kids love.

Ok thats fine, but there’s no need to knock vegetables off the menu.  Frozen vegetables are just as nutrit0us as fresh vegetables and as they are frozen within hours of being picked they retain all their nutrition.

It is just as easy to cook a few frozen vegetables as it is cook burgers or fish fingers.

If they insist on chips go for oven chips as they contain less fat. if they have an aversion to greens try them with frozen corn, boiled or steamed. Try frozen baby carrots, kids are more likely to go for these rather than the chopped variety.

Cook a small amount of mixed frozen vegetables,they can be cooked together, then place just one sprout, one small floret of cauliflower, and a small piece of brocoli on each plate, see if you can tempt the children to try them.

Quite often it is the amount that might put a child off so just one of each might do the trick and slowly but surely you can increase the amount.

Although it is well over 60 years ago I was one of those kids that wouldn’t touch greens, my main meals consisted of meat, potato’s and gravy when I would eat it.  The only thing I would eat happily and for every meal was  kelloggs corn flakes.

Needless to say I never suffered from any childish ailment even though my brothers and sisters caught everything. I’m not saying to feed them cornflakes every meal, although I stayed healthy eating them.  Oh bye the way, I love any greens and veg now, as you get older your tastes change.

You are up to your neck in debt and you don’t know which way to turn.  Is this You?

• First of all the DO NOTS. 
• Do not sign up to a debt management team. Yes they will lower your payments and sort them out for you BUT straight away you are adding to your debts.

Management debt counsellors charge a hefty fee for helping you out and you will be looking at paying them for many years to come.

·        Do not sign up for more loans to pay them off, guess what apart from paying off a few debts that are most pressing, you are bound to feel rich for a short while and you could get the spending fever again and you are back where you started. A few debts paid off, but an extra loan to pay off.

  ·        Do not apply for more credit cards in order to pay off another; you are piling debt on to debt.  ·        Do not go on a spending spree to cheer yourself up. And now how can you get yourself out of debt? 

First of all write down every single debt that you owe placing the highest amounts at the top of the list.

Next total the entire debt and see the huge amount of money that you owe, yes it will depress you but this is the start.

If you are honest you will realise that you are spending much more than you earn and eventually you will reach rock bottom.

  Spending is your first priority. What are you spending on to accumulate such a huge amount of debt?

Be honest with yourself and write down every thing you do and what you spend on.  Snacks, luxuries, clothes, leisure, holidays, alcohol etc.

When you get to the end of your huge list you must then decide what you can do without and what you can cut down on to save some extra money to start paying off those bills.

  What have you bought that was just on a whim and you don’t use? Your wardrobe is probably full to over flowing or the gadgets you have bought for your kitchen are lying unused on the shelf. 

Go through everything and if you don’t need it then sell it. Ebay auctions is a good source to sell your goods. 

You are probably already paying minimum payments on you credit cards which mean they will take years to pay as you are only paying off the interest, you will have to stick with this at the moment.

  Don’t bury your head in the sand, if you are getting threatening letters don’t discard them, they will just keep coming. 

If you have cut down on your spending you should have some extra money to pay out, so sit down and write to each of your creditors and explain clearly that you have got yourself in a mess and you can only offer them a small monthly payment at present.

Most of them will agree to this solution rather than receive nothing.

You now have the job of clearing your debts.  Start with the lowest ones first, then as they disappear the extra money should go on to the next lowest.

 It will probably take a long time to clear your debts but in the meantime you will have more peace of mind, and if you practice more economy it will get to be a good habit instead of the bad habits you have at present.