My regular readers, and even the accidental ones, know how I feel about debt: I believe that debt should be paid off and the faster the better. Today, on a forum for people trying to pay debt off I saw a slightly alarming post: someone had just realised that they have about £30,000 (about $47,000) worth of debt and asked whether joining a Debt Management Plan is their only option.
What was alarming was that there was little else to go by in this article. Yes, there was a mention of the reasons for the debt (bought a house, had children, were tempted by nice things), which in itself was sending warning signals as loud as an explosion. There was no awareness of causes (like ‘our life changed and our spending didn’t’), no information about earning, current spending or details about the debt(s).
Just a question that was impossible to answer!
What occurred to me is that we, personal finance bloggers, talk about what should be done, what could be done and/or what we have done. This all comes as separate actions.
What we rarely do, is emphasise that paying off debt is a matter of strategy before it is a matter of action!
This is why when we were paying off our debt we looked at all items of spending, all sources of income, analysed the economic and financial environment, assessed possibilities and envisioned opportunities. This is what I have been writing about on The Money Principle but I never clearly told you, my friends, that:
1) All this is about building a strategy so that we could plan, act and achieve; and
2) Using particular tools to do that was invaluable.
We looked around, and the budgeting tools we found didn’t do the job very well; so we developed our own system for managing our money and following our debt repayments. I did spend many dreamy hours gazing at our debt repayment spread-sheet, musing over more inventive ways to repay faster and sometimes…well, sometimes just admiring how far we had come along. And when the balance showed zero! Wow, this was like passing my driving test over again.
Having the tools to develop personal finance strategies, be it for paying off debt or building investments, is important. This is why, when my friend Jackie from The Debt Myth send me a message telling me about the Pay Off Debt app she’s developed (using the snowball principle) I knew that I want you to know about it.
Not only that I want you to know about this app but I also want you to tell your friends about it! This may be what they have been looking for so that tracking debt repayment is easy and seeing it go down exciting.
And to mark the launch of the Pay Off Debt app, Jackie is doing a cool give away: one lucky winner will walk away with an iPad Mini and a copy of the app. Just use the Rafflecopter form below to enter.