If you’re like so many people we’ve worked with over the years, then you know you SHOULD be doing better with money than you currently are, but you just seem to be living pay to pay, trying hard to pay down debt and get ahead, but you’re just going nowhere and you’re not really sure what to do or how to break free from the situation you’re currently in.
Let me ask you three questions:
1. Is your credit card ruling your life and preventing you from moving freely?
2. Does the fineprint on your credit card statement send shivers up your spine?
“If you make no additional payments and each month you only pay the minimum payment, you will pay off the closing balance of $6,091.39 on this statement in 20 years and 10 months and you will end up paying an estimated total interest charge of $6,696.93”
So by paying just minimum payments on your credit card you will more than double your current debt.
3. Do you feel like you a slave to your current circumstances, confined and restricted, with little chance of escape?
Then, I believe you are suffering from Credit Card Captivity!
Earning money, spending money, stressing about money, borrowing money, and paying money back…..This all takes over too many hours of our lives. When I talk to my clients about their debt they always say to me that they feel overwhelmed by it, stressed by it, and afraid that it may be a permanent part of their adult life. That’s the emotional cost of debt. The overwhelming hopelessness.
And, the sad thing is that, if you’re feeling this way, you are not alone.
A recent report from AMP states that 2 in 5 Australians are battling financial stress with an increase in sick days and time spent in the workplace dealing with money issues. More than 50% of Australians deal with financial stress on a daily basis and 85% say it impacts their wellbeing.
The most interesting statistic, I think, is the fact that 40% feel embarrassed by their debt and hesitant about seeking help from anyone.
In the words of one of my clients…..
“I was hesitant about seeking help, because my husband wasn’t aware I was sharing our financial problems with anyone. When you can’t handle your money you really feel like you’ve failed. You also feel ashamed and embarrassed because you just think you should know how to handle money, but you just don’t get taught this stuff. I knew that for both of us it was such a personal thing, but I also knew that without help we could be financially ruined.”
So, what’s the answer? How can you get rid of debt and take control of your finances?
How can you escape from Credit Card Captivity?
1. Understand the reasons you are in debt in the first place. Are you an emotional spender? Are you always chasing the next ‘bright shiny thing’? Do you like to keep up with the Jones’?
2. Put a structure in place for your money. We teach a model of having 3 accounts for your money. These accounts are
a. Sacred Money Account – this is where your income is deposited and your essential bills are paid from. Negotiate with your creditors
b. FFFI Account – Food, Fuel, Fun & Incidentals. This is your weekly living account where you allocate a certain amount of money each week to cover your living expenses and this amount is transferred from your Sacred Money Account to your FFFI account each week.
c. Life Happens Account – This is for the unpredictable events that just happen when you least expect them. An amount, no matter how small to start, is deposited into this account and then when ‘life happens’ you’re prepared for it.
3. Negotiate with your Providers. Before you contact a Creditor to negotiate your debt, make sure you have systems and processes in place so creditors know you are serious about making change. It’s important that you present as someone who is worthy to help.
We have created a comprehensive resource with 5 simple steps to help you start negotiating with your creditors and this is available when you register for our FREE Webinar……….
4. Put some ‘Life’ or ‘Debt’ Rules in place. What I’ve come to realise is that if you don’t have rules around anything in life then anything can happen. People who have rules tend to have a much less dramatic and turbulent lifestyle, so I’m a firm believer that it’s putting money rules, especially ‘life’ or ‘debt’ rules in place that makes all the difference.
5. Put a Spending Plan in place for your money. Having a plan for your money will ensure, not only that you can pay all of your bills on time, all the time, but also that you can plan the future that you really want. A Spending Plan is a unique tool in that it is forward looking, it doesn’t depend on income or pay cycles, and it can plan 10 years into the future.
6. Make yourself accountable to someone who will make sure you achieve your goal. If you want to lose weight you engage a personal trainer, if you’re sick you seek medical advice, if you want to learn something, you seek the advice of someone who has the information you seek.
We believe if you’re in financial stress, or credit card captivity, and on a treadmill of constantly living pay to pay, if you’re relationship is flagging because money issues are weighing you down, or if you constantly worry and don’t sleep because you can’t keep on top of your bills, you need to seek help.
7. Pay yourself first. This is a simple principle straight from the book ‘The Richest Man in Babylon’.
It may sound strange to pay yourself anything when you are so much in debt, but this will ensure that you have a nest egg to secure your future and create a cushion for those ‘life happens’ events. Ideally you should have 3-6 months saved in case of a financial fire emergency. With this amount of money saved you won’t have need to reach for a credit card.
If you would like some help escaping credit card captivity, simply book a 15 minute Money Success Breakthrough call with me – it’s 15 minutes that could change your world! There’s absolutely no obligation, it’s simply an opportunity for you to have a chat with me about your own personal situation and we can see if we have a program to suit.
You can book a call by going to moneysuccess.com.au which will take you to my availability calendar and you can choose a time to suit you.
Cheers to freeing yourself from credit card captivity and enjoying the spoils of being debt free and stress free.