>Rules for Managing Debt:

• Make a commitment to eliminate your debt.

• Stop buying things you cannot afford. Remember, if you have to borrow for it, you cannot afford it.

• If you cannot manage the temptation of shopping with credit cards, please stop using them. Use cash instead. It is far more finite and controllable.

• If you absolutely have to have a credit card, just have one – with a limit of no more than $1,000 to $5,000.

• If you are prepared to use credit cards, set a budget for what expenditure you will use your cards for, and manage them on a month to month basis.

• Always pay off credit card debt first. This is usually the most expensive with interest rates of up to 20% per annum. Pay off your debts in order of cost. The hi

In his book, The Cashflow Quadrant, Robert Kiyosaki says “The more people you are indebted to, the poorer you are”. I also agree with this philosophy. In fact, when speaking to groups or consulting clients, my attitude always changes when we start to focus on debt management. I am tough on debt, and I believe everyone who strives for financial freedom should be too.

There are several reasons why debt is such a problem in society today. In the 1970s, banks started issuing credit cards. When they first came out, your bank just sent you one. No application forms, no credit checks, nothing – they simply sent them out in the mail. As long as you had an account, you were eligible for a credit card. Easy money. Or so it seemed.

In the 1980s, credit cards were still very easy to obtain. More and more organizations and institutions started issuing them. Store cards, dining out cards, cards for travel. Visa, Mastercard, Bankcard. The list was endless. Although it was customary to have a cursory credit check, you would have had to been guilty of robbing the Bank of England before your credit was denied. If you missed a monthly payment, no one cared. The only important thing was that you had a wallet bulging with credit cards.

And so began the demise of our debt-ridden society. Easy cash. Easy credit. Won’t worry about now, I’ll worry about it later.

Fortunately, the severe recession of the early 1990s put an end to slapdash credit checking. The banks had lost too much money and they had to pull in the reins. However, after 20 years conditioning, society was still tied to its credit card apron strings. Credit cards were always very expensive debt. But despite having to pay between 15% to 20% interest, most people still preferred to take the easy way out.

Another reason for our escalating debt is our post-war baby-boomer society. Our parents or grandparents, who lived through two world wars and the Great Depression, knew the meaning of managing money. Not that I advocate hardship but the baby-boomers did grow up a little spoilt. Our now-now-now attitude makes most of us act like naughty little children let lose in the candy store. So many wonderful, shinning new toys – videos, DVDs, microwave ovens, dishwashers, brand-spanking new cars – and not enough time to save for them.

We have forgotten the meaning of necessity. Our post-war generations have grown more and more materialistic, and less and less patient. Our grandparents knew that if they wanted something new, they had to save up for it first. Today’s buy-now-pay-later society has forgotten these rules – and the result is escalating debt.

More than ever before, we have the ability to earn a lot of money. There are more middle-income earners now than previous generations, but the wealth distribution stays about the same. The more we try to live above our means and buy things we cannot afford, the deeper we dig our debt-ridden ditches.

In order to eliminate this insidious financial trap from our lives, we can take a few small steps to successfully manage and reduce our debt.

Rules for Managing Debt:

• Make a commitment to eliminate your debt.

• Stop buying things you cannot afford. Remember, if you have to borrow for it, you cannot afford it.

• If you cannot manage the temptation of shopping with credit cards, please stop using them. Use cash instead. It is far more finite and controllable.

• If you absolutely have to have a credit card, just have one – with a limit of no more than $1,000 to $5,000.

• If you are prepared to use credit cards, set a budget for what expenditure you will use your cards for, and manage them on a month to month basis.

• Always pay off credit card debt first. This is usually the most expensive with interest rates of up to 20% per annum. Pay off your debts in order of cost. The hig

l very easy to obtain. More and more organizations and institutions started issuing them. Store cards, dining out cards, cards for travel. Visa, Mastercard, Bankcard. The list was endless. Although it was customary to have a cursory credit check, you would have had to been guilty of robbing the Bank of England before your credit was denied. If you missed a monthly payment, no one cared. The only important thing was that you had a wallet bulging with credit cards.

And so began the demise of our debt-ridden society. Easy cash. Easy credit. Won’t worry about now, I’ll worry about it later.

Fortunately, the severe recession of the early 1990s put an end to slapdash credit checking. The banks had lost too much money and they had to pull in the reins. However, after 20 years conditioning, society was still tied to its credit card apron strings. Credit cards were always very expensive debt. But despite having to pay between 15% to 20% interest, most people still preferred to take the easy way out.

Another reason for our escalating debt is our post-war baby-boomer society. Our parents or grandparents, who lived through two world wars and the Great Depression, knew the meaning of managing money. Not that I advocate hardship but the baby-boomers did grow up a little spoilt. Our now-now-now attitude makes most of us act like naughty little children let lose in the candy store. So many wonderful, shinning new toys – videos, DVDs, microwave ovens, dishwashers, brand-spanking new cars – and not enough time to save for them.

We have forgotten the meaning of necessity. Our post-war generations have grown more and more materialistic, and less and less patient. Our grandparents knew that if they wanted something new, they had to save up for it first. Today’s buy-now-pay-later society has forgotten these rules – and the result is escalating debt.

More than ever before, we have the ability to earn a lot of money. There are more middle-income earners now than previous generations, but the wealth distribution stays about the same. The more we try to live above our means and buy things we cannot afford, the deeper we dig our debt-ridden ditches.

In order to eliminate this insidious financial trap from our lives, we can take a few small steps to successfully manage and reduce our debt.

Rules for Managing Debt:

• Make a commitment to eliminate your debt.

• Stop buying things you cannot afford. Remember, if you have to borrow for it, you cannot afford it.

• If you cannot manage the temptation of shopping with credit cards, please stop using them. Use cash instead. It is far more finite and controllable.

• If you absolutely have to have a credit card, just have one – with a limit of no more than $1,000 to $5,000.

• If you are prepared to use credit cards, set a budget for what expenditure you will use your cards for, and manage them on a month to month basis.

• Always pay off credit card debt first. This is usually the most expensive with interest rates of up to 20% per annum. Pay off your debts in order of cost. The hi

fter 20 years conditioning, society was still tied to its credit card apron strings. Credit cards were always very expensive debt. But despite having to pay between 15% to 20% interest, most people still preferred to take the easy way out.

Another reason for our escalating debt is our post-war baby-boomer society. Our parents or grandparents, who lived through two world wars and the Great Depression, knew the meaning of managing money. Not that I advocate hardship but the baby-boomers did grow up a little spoilt. Our now-now-now attitude makes most of us act like naughty little children let lose in the candy store. So many wonderful, shinning new toys – videos, DVDs, microwave ovens, dishwashers, brand-spanking new cars – and not enough time to save for them.

We have forgotten the meaning of necessity. Our post-war generations have grown more and more materialistic, and less and less patient. Our grandparents knew that if they wanted something new, they had to save up for it first. Today’s buy-now-pay-later society has forgotten these rules – and the result is escalating debt.

More than ever before, we have the ability to earn a lot of money. There are more middle-income earners now than previous generations, but the wealth distribution stays about the same. The more we try to live above our means and buy things we cannot afford, the deeper we dig our debt-ridden ditches.

In order to eliminate this insidious financial trap from our lives, we can take a few small steps to successfully manage and reduce our debt.

Rules for Managing Debt:

• Make a commitment to eliminate your debt.

• Stop buying things you cannot afford. Remember, if you have to borrow for it, you cannot afford it.

• If you cannot manage the temptation of shopping with credit cards, please stop using them. Use cash instead. It is far more finite and controllable.

• If you absolutely have to have a credit card, just have one – with a limit of no more than $1,000 to $5,000.

• If you are prepared to use credit cards, set a budget for what expenditure you will use your cards for, and manage them on a month to month basis.

• Always pay off credit card debt first. This is usually the most expensive with interest rates of up to 20% per annum. Pay off your debts in order of cost. The hi

We have forgotten the meaning of necessity. Our post-war generations have grown more and more materialistic, and less and less patient. Our grandparents knew that if they wanted something new, they had to save up for it first. Today’s buy-now-pay-later society has forgotten these rules – and the result is escalating debt.

More than ever before, we have the ability to earn a lot of money. There are more middle-income earners now than previous generations, but the wealth distribution stays about the same. The more we try to live above our means and buy things we cannot afford, the deeper we dig our debt-ridden ditches.

In order to eliminate this insidious financial trap from our lives, we can take a few small steps to successfully manage and reduce our debt.

Rules for Managing Debt:

• Make a commitment to eliminate your debt.

• Stop buying things you cannot afford. Remember, if you have to borrow for it, you cannot afford it.

• If you cannot manage the temptation of shopping with credit cards, please stop using them. Use cash instead. It is far more finite and controllable.

• If you absolutely have to have a credit card, just have one – with a limit of no more than $1,000 to $5,000.

• If you are prepared to use credit cards, set a budget for what expenditure you will use your cards for, and manage them on a month to month basis.

• Always pay off credit card debt first. This is usually the most expensive with interest rates of up to 20% per annum. Pay off your debts in order of cost. The hi

>Rules for Managing Debt:

• Make a commitment to eliminate your debt.

• Stop buying things you cannot afford. Remember, if you have to borrow for it, you cannot afford it.

• If you cannot manage the temptation of shopping with credit cards, please stop using them. Use cash instead. It is far more finite and controllable.

• If you absolutely have to have a credit card, just have one – with a limit of no more than $1,000 to $5,000.

• If you are prepared to use credit cards, set a budget for what expenditure you will use your cards for, and manage them on a month to month basis.

• Always pay off credit card debt first. This is usually the most expensive with interest rates of up to 20% per annum. Pay off your debts in order of cost. The higher the interest rates, the more costly the debt.

• Eliminate wastage and extravagance by always asking yourself before you buy anything, “Do I absolutely need this?” You may find after awhile that the real answer is often “No”.

• Remind yourself, that any hardship you may experience now is only short-term. The time will soon pass and ultimately you will be grateful. The discipline you exert now will mean extra dollars in the bank later.