Get on the road to debt freedom

Top tips to help you pay off overdrafts and loans Life is never a straight line, and we all have highs and lows. Our spending is no different either.

I was chatting to my children earlier this week and explained that when you have an expensive month, like we did in December, it’s right to reign in your spending in January, otherwise you could easily find yourself in debt.

That’s coming into sharp focus now as December credit card statements arrive in inboxes and on doormats.

For some, the statement will reflect Christmas extravagance. Unsurprisingly, online sales grew strongly in 2021 – a year in which retailers invested heavily in their e-commerce platforms.

The challenge with online sales is that there is no emotion involved in the transaction; there’s no spending pain.

When you pay cash, you see the money leave your hand and you physically experience the transaction.

Online, you simply click a button and the payment is taken. It’s different.

This kind of spending – and non-attachment behaviour – can get us into serious financial trouble, and it’s part of the reason I believe credit card debt in the UK and much of the developed world is out of control.

According to the Office for Budget Responsibility’s October 2021 forecast, household debt of all types is expected to rise from just over £2billion in 2020 to almost £2.4billion in 2025.

The average UK credit card interest rate is a whopping 21.5%, according to the Bank of England. Nobody can afford to carry a liability like this.

If you’ve had enough of the financial burden on your shoulders, then follow my six-step plan on the right to repay unsecured debt, such as credit cards, overdrafts, loans and car finance.

To learn more about the plan, go to WarrenShute.com or search for the Money Planner podcast online.