A Look at Why We Fail to Get Out of Debt
I am £65K in debt to credit cards, over drafts and personal loans. I have two mortgages secured on my house, a financed car, and no money.
How did I get here?!
This is a very real scenario that many people experience each and everyday. OK, it may not be 65K, it may be 5K, 9K, 21K, etc…the numbers change, but the experience and feeling are the same.
For many people it is like a snowball rolling down a hill. As the snowball rolls downward, it gathers more snow, getting larger as it rolls down, only to get so large it breaks apart, or hits the bottom of the hill.
So it is with many people’s personal finances.
At what point do you start to see the snowball getting too large, at £5K of debt, £15K, or maybe at £500. It can vary for people.
For many of us, credit and using credit, is a necessary part of life. However, when we carry more in debt than we earn in a year, or borrow from one account to pay another, or use credit cards for food and other basics, this is a sign; a warning sign. Many of us wait until we cannot make the minimum payments or fall behind as a warning sign. This is more than a warning sign, it is a wake up call as loud as the morning alarm.
So how does the snowball begin? Quite small and non-threatening. A new credit card, why not use it? Wanting, not needing something. Buying a new home and wanting it to look the best immediately, desire for instant gratification.
They have a new car, why don’t I? I work hard and deserve to treat myself once in a while. Medicating ones self through the shops and purchases. Closets full of new unworn clothes, the tags still on them.
And so the snowball grows.
Hiding purchases from your partner.
Extravagant holidays.
You stop looking at your statements each month. You know the balances are growing, but maybe if I just let them lie there on the table they’ll go away.
You stop going to the postbox to get the mail each day. It’ll be there for me tomorrow.
The snowball grows.
As the snowball rolls downward and gets larger, it also gets harder to stop. It is the same with debting.
Thinking it will go away is not going to work, because it will not go away.
For many there is the embarrassment and shame of having this large snowball in their life, rolling over them.
The longer you wait, and the larger the debt becomes, the harder it is to pay it off or resolve it. Debts can always be cleared, ultimately by bankruptcy, but there are so many options prior to that, but it needs to be caught in time. The snowball can no longer just be melted by a warm sunny day, it takes many sunny days, or maybe a blowtorch!
That blowtorch is bankruptcy.
There needs to be a line drawn in the sand, a day when you say, “I need to stop”. A day to break the cycle.
Easier said then done, right. Seeing that large snowball of debt coming down a hill is quite a scary thing. But you are not alone. If you look at the numbers and studies of people in debt and the amount of debt that is carried by the average household you are not alone in this at all.
It is not just you and this huge, menacing piece of debt.
So what to do? Where to begin?
Face the beast!
Review your statements and see the total amount of debt you have. Are you comfortable with this number? Can you pay it off in a few months?
Stop debting! Stop using the credit cards and overdrafts each month.
Take a hard look at your monthly expenses, track them daily to see where you may be able to make some changes or adjustments.
If you are not sharing this with your partner, you need to talk with them.
If you are using credit to make ends meet each month you are gambling! Rolling the dice with your future earnings and monies.
Work out a household spending plan, melting the snowball over a period of time. Contribute more than the minimum payment each month to the debt. Melt it away.
If you feel you cannot handle this on your own, maybe it’s time to talk to a professional about your options, and what can be done.
Don’t let the snowball roll you over.
