OK, I already owned up to the staggering amount of debt we had three years ago (just a reminder: it is mostly gone and we are expecting to be making the final payment any day now) but I never told you the story as it was – probably because it was never my intention that this blog becomes a record, a diary of us paying off our ‘negative wealth’. Tonight, as a special opening to the series of articles on debt and what to do about it I am going to tell you the story – with six points that can be used as a check list. If you answer ‘yes’ to at least four of these, please get off the internet (or log in your internet bank account but nothing else) and start working it out.

It is true that at the beginning is feeling; this ought to be followed by detailed knowledge – and more than one kind of knowledge if you are to get anywhere in this ‘debt butt kicking’ game.

At the beginning was feeling

I remember, as if it was a week ago, the dark and wet autumn evening slightly over three years ago. Dark and wet is not unusual for Manchester (Manchester UK, this is :)); what was unusual was the gloomy feeling around the kitchen table, John’s face telling stories of sleepless nights and endless hours working and the tight knot in my belly, the premonition that ‘the sh*t is just about to hit the fan’ and the impotence to do anything about it.

When I think back, nothing had happened; it was just a feeling. Then I looked up and saw the kitchen ceiling: bits of it hanging down because of continuous leaks from the two bathrooms on the first floor and it was still in place only because of the patching John did after it fell down. Yes! We were sitting in a kitchen the ceiling of which fell down on the day of my 45th birthday party (we were expecting over fifty guests) and two and a half years later was still like that.

The sight of the ceiling tipped me over and I started shouting; if you asked me what was said I don’t remember, if you ask me who was my anger directed to – nobody. It was a proper full blown tantrum; one where you really have to kick something, use some words referring to different reproductive practices and forget about it. But out of the blue, and this I remember, I said: ‘I can’t take this anymore; all we earn goes in this pile of poo! I want it sold and that is that!’

To this, John responded and my tantrum morphed into a full blown family crisis – the knowledge about our financial situation was born from this crisis. Hard to believe it, I know, but at the time I had absolutely no idea what I earn, what John earns or what we spend on different budget items. How was I supposed to know whether, and in how much, debt we are?

During that dark and wet evening, in our kitchen the ceiling of which was falling on our heads, a vague feeling of unease became the crisis that precipitated knowledge. My tantrums are not pretty; but without them e won’t be ‘functionally’ debt free today.

Six signs that you may have too much debt

Here are the six signs that you may be in too much debt and it can be used as a check list:

  1. You have ‘the feeling’. This is difficult to explain but before I did my numbers I had this feeling that things are not right; my worry about money kept coming to the surface and I kept pushing it back. Although this is difficult to pinpoint and explain I believe that anyone who is in serious debt would immediately know what I am talking about. Also it is very closely linked to the next sign.
  2. You don’t look at your financial statements. This is very common behaviour in people who have the feeling of impeding financial doom but not the guts to learn exactly how bad it is. It may be that you never check your balance when taking money out of the ATM; or you have forgotten what a financial print out looks like; you have no idea what your password for on-line banking is. I didn’t look at a financial statement for almost a decade; I know!
  3. You have no idea how much is in your bank account. This is an immediate consequence from the previous point. Because you never check, you never know. But this also means that you don’t know how much goes in your bank account, what are you paying for, and are there redundant payments. You can’t chose to switch providers and get better deals for large expenses.
  4. You think ‘my problem is so much bigger’ when you are buying something expensive. This is a very interesting one. Most people who are in control of their finances either know they have enough to cover the bill, or that they will have to forego something else to do it. People who are likely to be in debt think differently; they justify their purchase by stating that things are so bad anyway they can’t get worse.
  5. You have no idea how much a pint of milk or a loaf of bread costs. These are basics; if you don’t know how much you pay for a pint of milk it is unlikely you will notice any other expenditure. This is turn means that you are not likely to be able to judge what is ‘good value for money’.
  6. You are surprised every time you open your wallet. Yep, you either have too much in it or too little. But you never really know what to expect. Whilst this is certainly a way to make your life that little bit more interesting it is also a sign that you are not in control of your money.

How did you do?