There is nothing inherently wrong with debt. If used correctly, debt can be a signficant tool to secure assets which can grow a future wealth base and a cashflow income. Carefully used debt, which is reasonably affordable for you to support on your income to acquire growth or income assets, has long been an accepted way to become wealthy over time.
Sadly though, few people have a clear plan and a system for utilising debt effectively. So many think of their homes as an ATM machine, drawing out funds to live better, buy that nice new car or head off on that fabulous holiday.
It is that kind of debt use – using money you don’t really have to buy stuff that you don’t really need to impress people you don’t really like – which could get you in to serious trouble down the track.
Work – borrow – buy – consume – die – this is not the kind of life you deserve. You can have so much more!
If you find yourself in what is simply an uncomfortable amount of debt or maybe you are in an ever-increasing debt spiral, there is a cure.
The simplest ways you can start to get your debt back under control are written here for you:
1. Cut up credit cards – all they do is allow you to spend more than you earn. They are financial quicksand!
2. Don’t redraw on your loan for “stuff” that will go down in value. To go deeper into debt for a liability is not a smart money decision. TVs, Cars etc
3. Measure your cashflow position each month. Pay attention to your statement each month as we show you what your net cashflow position is. You should be building equity in your home by having surplus cashflow accumulating in your loan each and every month.
4. Have an emergency fund. Build up 3 months worth of loan repayments and living expenses in your loan account. Having a safety net is a huge step forward towards financial security.