Ask The Expert
Dealing with Debt
We all love a bit of retail therapy, but beware, it can be dangerous. The availability of credit, debit and store cards, means that millions of us borrow way beyond our means. It's hard to be content with what we have or can realistically afford, but UKTV Style's Agony Aunt has some advice.
Hi Debbie,
Help! My debit card is running away with me - I don't know how to manage my money and I get really carried away. I'm always shopping for stuff that I convince myself I need. I love new clothes and can't resist running up huge debts on my debit card. Even though I don't have the money, I own countless store cards. It's all too tempting. I think I need help.
Thanks,
Jo
UKTV Style's Agony Aunt replies:
Hi Jo,
You talk as if your debit card has a mind of its own. The debit card is not running away with you; you are using the debit card as an excuse to buy anything that takes your fancy. Remember the words of Charles Dickens' famous character Mr McAwber: "Annual income twenty pounds, annual expenditure nineteen pounds, nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."
You need to come to terms with the dull, but unavoidable truth: you can't afford everything you want and must learn to live within a budget. Everyone, however well-off they may seem, has to do it.
The good news is that it sounds like you are scared by your level of debt and want to get it under control. That's a vital first step. The second step will involve a bit of organisation and, ultimately, self control!
You need to sit down in the harsh light of day and work out precisely how much income you have every month. Then deduct the essential bills that have to be paid - rent, mortgage, utilities, insurances, pension, rates and so on. If some of these are paid annually or quarterly, look back at last year's bills, add the whole lot up for the year, and divide by 12. This will tell you how much you need to save out of your income for the boring bits. Talk to your bank and get all these bills paid by monthly standing order - most utility companies are happy to do this. Then it will become very clear how much is left each month for the rest of life - food, drink, eating out, clothes, hairdressing, holiday, CDs and so on.
When you're out and about using your card, keep a note in a little book of what you are spending. Don't forget to include cash withdrawals and make a note of what this is used for too. Total it all up each day and you will soon begin to see why your debit card is getting away with you! If you are starting to get near your financial limit for the month but there are still two weeks to go, then prioritise the important things like food and so on and stop going shopping. You don't really need new shoes or trousers or a CD, or even a night out with your mates.
If you can't afford it, you can't have it. Do something that doesn't involve much money - go for a walk, read a book, invite a friend round for a meal - whatever. Gradually, you will begin to get your spending under control and learn to judge instinctively, without keeping notes, how much you can spend each month.
Of course, you could just chop the card up and throw away the pieces - and I have met compulsive shoppers who have had to do this. But it's not easy living your life on a cash basis. Cards make life a lot simpler as long as you remember who's in control.
Good luck!
Debbie
For more help on dealing with debt and budgeting, check out Balancing Act and Dump The Debt.
Help! My debit card is running away with me - I don't know how to manage my money and I get really carried away. I'm always shopping for stuff that I convince myself I need. I love new clothes and can't resist running up huge debts on my debit card. Even though I don't have the money, I own countless store cards. It's all too tempting. I think I need help.
Thanks,
Jo
UKTV Style's Agony Aunt replies:
Hi Jo,
You talk as if your debit card has a mind of its own. The debit card is not running away with you; you are using the debit card as an excuse to buy anything that takes your fancy. Remember the words of Charles Dickens' famous character Mr McAwber: "Annual income twenty pounds, annual expenditure nineteen pounds, nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."
You need to come to terms with the dull, but unavoidable truth: you can't afford everything you want and must learn to live within a budget. Everyone, however well-off they may seem, has to do it.
The good news is that it sounds like you are scared by your level of debt and want to get it under control. That's a vital first step. The second step will involve a bit of organisation and, ultimately, self control!
You need to sit down in the harsh light of day and work out precisely how much income you have every month. Then deduct the essential bills that have to be paid - rent, mortgage, utilities, insurances, pension, rates and so on. If some of these are paid annually or quarterly, look back at last year's bills, add the whole lot up for the year, and divide by 12. This will tell you how much you need to save out of your income for the boring bits. Talk to your bank and get all these bills paid by monthly standing order - most utility companies are happy to do this. Then it will become very clear how much is left each month for the rest of life - food, drink, eating out, clothes, hairdressing, holiday, CDs and so on.
When you're out and about using your card, keep a note in a little book of what you are spending. Don't forget to include cash withdrawals and make a note of what this is used for too. Total it all up each day and you will soon begin to see why your debit card is getting away with you! If you are starting to get near your financial limit for the month but there are still two weeks to go, then prioritise the important things like food and so on and stop going shopping. You don't really need new shoes or trousers or a CD, or even a night out with your mates.
If you can't afford it, you can't have it. Do something that doesn't involve much money - go for a walk, read a book, invite a friend round for a meal - whatever. Gradually, you will begin to get your spending under control and learn to judge instinctively, without keeping notes, how much you can spend each month.
Of course, you could just chop the card up and throw away the pieces - and I have met compulsive shoppers who have had to do this. But it's not easy living your life on a cash basis. Cards make life a lot simpler as long as you remember who's in control.
Good luck!
Debbie
For more help on dealing with debt and budgeting, check out Balancing Act and Dump The Debt.
