Do you remember that song: ‘Money makes the world go round, the world go round’?  Well it seems with the world economy on its knees it is now debt that is keeping it propped up!

In the Money Week report I posted on my blog yesterday, ‘Forget Greece – the real debt crisis is still to come’, it states:

“The economic boom that ended in 2007 always seemed too good to be true. That’s ‘because it was. It was built on borrowing, much of it personal. In the UK, the ratio of household debt to disposable income hit its highest-ever level of 160% by mid-2008, according to the Office of National Statistics.

Now the game’s changed completely. Incomes have been squeezed by rising job losses and the economy going wrong. Apart from at Christmas times, consumer loan growth has been declining in almost a straight line for the last two years. In fact, credit is now contracting.

But there are still millions of over-indebted Britons. And many are now finding it too difficult to make ends meet. In 2009, 134,000 people in England and Wales went into some form of personal insolvency. That’s the highest-ever recorded figure and up 26% on 2008. “The huge number demonstrates the real effect the recession is having on the average person in the UK”, says Pat Boyden at accountancy group PwC. “

http://www.moneyweek.com/news-and-charts/economics/eurozone-forget-greece-the-real-debt-crisis-is-still-to-come-00601.aspx

All quite dire stuff! Many of us would like to stick our heads in the sand when it comes to our finances and the state of the economy, but the reality is that in the coming days and months, this may no longer be a solution to your money woes. Furthermore the only person who is going to get you out of debt is YOU! The banks don’t care; they want us to be in debt, which is why I write this article. As individuals, we have to take responsibility for our money and for our bank account(s).

So how do we, as individuals, get out of debt? One way is to get a bigger income, but with salary freezes and not enough jobs for the unemployed, much less the employed, this will be difficult. So the second option is get a debt solution! But first of all, to ascertain that solution one has to ask themselves a number of key questions:

• How important is becoming debt free to you?
• Do you know or even have a ‘debt freedom’ date?
• What is your strategy to get out of debt?’

There are generally two types of (personal) debt:  fixed term – mortgage/personal loan, etc; and evolving debt, such as credit cards and store cards.  It is evolving debt, with the monthly compounded interest working against us rather than for us, that traps most of us into years of poverty, and has built up the UK’s consumer debt total to nearly £1.4 trillion! And the reason for this is because the habit of most individuals is to pay only the minimum amount required on their credit cards. It is our habits that have created our present financial terrain, and will ultimately, create our futures ones, as well.

As an FSA approved and appointed independent representative of Genistar, we offer three solutions to debt elimination, depending on your personal and financial circumstances:

1. Debt Stacking
2. Debt Acceleration
3. Debt Consolidation

If none of these options are viable to the client then there are various debt management programmes to consider.  And as the above article excerpt states, more and more people are doing this! Debt affects everyone, so I pose my earlier questions again:

• How important is becoming debt free to you?
• Do you know or even have a ‘debt freedom’ date?
• What is your strategy to get out of debt?’

To Your Financial Success & Becoming Financially Savvy!

FSA Approved & Appointed Independent Genistar Representative

P.S. Debt is a silent killer! I know! For many years I tried and failed to get out debt! And it depressed me! I now have a plan, and I owe that plan to someone sitting down with me and giving me a financial education and a financial game plan! So, get in-touch with me and my team at Butterfly Wealth Creation to have a financial game plan done of your own. Not only will we assess your financial situation with a personalised report, but also give you a debt freedom date with a clear and concise strategy to get out debt! Furthermore, we may even save you some money! (UK Residents only)