STILLNESS JAR

Spending and consumption like saving is a habit. To wean off the urge to spend on something everyday, assign one day in the week that must be a "stop consumption" or a StopCon day. No purchases, expenses are made on this day of the week (assume direct debits and standing orders do not count). This will enable you to reduce the rate of consumption and spend.

Slowing down the consumption rate would mean that your outgoings will likely be at par with incomings (hopefully lower) and remove the primary reason why individuals go into debt. Refer back to the Budget discussion in GENESIS.

The first step to recovery is identifying that there is a problem. It is not unusual for most individuals to carry some form of debt - be it mortgages, loans, credit card balances or overdrafts. Understand first which debts are most costly to finance - these will probably be the credit cards and the unarranged overdrafts.

Create an Excel spreadsheet to list ALL debt items and list them in order of the balance outstanding. The mark the most expensive ones. When you are paying back each item of debt, pay a bit more to the more expensive ones. Ensure that you do not continue practices that will further grow the debt pile. Taking small, steady and reasonable steps, one can reduce and hopefully eliminate the high cost debts.

The only debt that is acceptable to carry over a longer term is the mortgage. However, ensure you are signed up to a 3- or 5-year fixed rate term.

This is quite a common theme among the younger (and sometimes even the older generation!). Living for today is fine as long as you have planned for a tomorrow. Living today at the expense of tomorrow is a grave mistake. If we sign off tomorrow, then rightly so, we won't care. If however, we do not and carry on for decades, we want that time to be free of stress and worry - especially on something as insidious as money. 

Remember: money is a great servant but a terrible master!