This will be the first article for our blog covering a financial subject. I would like people to remember, financial advice that we read online is always general in nature. While you can get some great ideas and structures, you should never take it as applying directly to your situation. Everybody’s situation is different and you should seek professional advice specific to your needs.
In this topic I would like to cover what I refer to as financial suicide or signing your arse over. I’m speaking of taking on household debt. Unfortunately I didn’t come from a financially educated background and had to learn things the hard way. Growing up, the closest thing I received to financial advice was this “Just put your big purchases on the credit card, it forces you to pay for it instead of pissing your cash up the wall” Wow this makes sense 18 year old me thinks to himself. Needless to say by following this advice I successfully screwed myself for the next few years.
So here’s how it happened. Step one was to work enough to be approved for a credit card or loan. Buy some shit you probably don’t need with the credit and pay for it on the monthly credit card bill.
What happened next is the part that no body explained to me. Before I took any credit I could easily afford my way of life. I was young, with very few commitments. Living in a cheap rental, working a part time job and drinking with my friends on the weekend. The problem I found was this, every time that the credit bill arrived, it was costing me my drinking money for the upcoming weekend bender. How could I fix this issue? Simple, I just had to earn some more cash. I excepted a different job that was full time. It wasn’t as interesting as my previous role but it paid more, and it offered more hours each week.
After working my new job for a few months, I was having some issues with my poor old car. I needed my car to be reliable and I worked a lot. So I figured “Hey I deserve a nice car to drive” So off to find a new car we go. Now, finance companies have mastered the art of fucking your life from this point on and that’s exactly what they did to me. I knew I wanted a new car and that was about the limit to my knowledge when I decided to buy one. I didn’t know the difference between secured loan, or unsecured. I didn’t know about compulsory insurance, service requirements interest rates or much else for that matter.
So after blindly signing my arse away for a newer model car, I was now set for “reliable” trip to work every day. Then my same old problem came back. After working all week and paying for my car and credit card bills I still couldn’t afford to go have a few drinks with friends. See a pattern here? What happens next is what is happening to most of us in the modern world. I started working over time and weekends to pay my debt. I worked all the time, I used credit to buy shit I couldn’t afford and it forced me to work more.
Finance and the way it is marketed, is a legal way to rape you of your cash and any happiness you may of had from it. Household debt ties you to your job and the over time, with no escape. What may have been a simple car purchase tied me to a particular way of life for the next 5 years.
What can we do about it? First of all you need to change your mindset. Credit cards, car loans, personal loans etc are not normal or fine to use. Get rid of your debt! Cut up credit cards, pay down any existing debt as a priority over all expenses. I know people that have ten grand invested on the share market but twenty grand in credit card debt. This is crazy!! Their investments are making around 7% a year in return on the share market but their debt is costing 19% a year. Before investing, saving or doing anything fun. Pay your debt first!
Debt is destroying peoples lives. It breaks up marriages, ruins decades of fun and makes you a slave to money. If your lucky enough to be reading this debt free then congratulations. I suggest you read as many financial books as possible, to confirm what I am saying and save yourself from all the misery. If you are currently in debt and its sucking the joy from your soul. Get help! Find ways to get rid of it. Pay down your debt, break your credit cards and change your mind set.
We would love to hear your thoughts and experiences on the subject of debt.