Does debt control your decision making?

How many of us live out our day to day lives compromised by what we can afford to do, as opposed to doing what we really want to? 

How many times have you heard a friend (or even yourself) dream out aloud how they would live if they won tattslotto? – Dreaming about a tattslotto win is NOT an effective strategy.  

I’ve spent over thirty years working in the finance industry, and in my experience what most frequently compromises a person’s capacity to live the lifestyle they really want comes down to an inability to budget well, and an over reliance on debt.

The ability to craft a sustainable budget, along with the ability to understand and control the effective use of debt will go a very long way to creating a lifestyle that allows you to do more of the things you really want to.

To illustrate my point, think of it like this;

Let’s imagine Mr & Mrs Bloggs

• Home mortgage $250,000 owing – approximate payment $1460 per month
• Credit card 1 $10,000 owing – approximate payment $300 per month
  
• Credit card 2 $5000 owing – approximate payment $150 per month
  
• Car loan $25,000 owing – approximate payment $515 per month

 
In the fictional example above Mr & Mrs Bloggs need to pay out a minimum of $2425 per month just to keep up with the minimum payments on their existing financial commitments.

In addition to debt servicing costs, Mr & Mrs Bloggs also need to make allowances for ongoing cost of living expenses such as education costs, groceries costs, insurance costs and utilities costs.

This is BEFORE they can commit to spending any money on lifestyle wants. The level and structure of their existing debt is then compromising how they may really want to spend their lives, and potentially adding a source of anxiety to their day to day lives.

At Empower Money Management I specialise in assisting people to craft sustainable monthly budgets, and I coach people to understand and control their effective use of loan facilities.

In my experience people who are in control of and understand their own financial affairs will generally lead a less stressed quality of life.

I would love to help more people gain a greater understanding and control of their own financial affairs – to learn more or to make an appointment contact leigh@empowermm.com.au or see www.empowermm.com.au