supplement your income using credit.
Lay-by used to force us to really think
easy access to thousands of dollars worth
of credit on multiple cards has made over-
spending easy.
Wealth Partner, advises thinking about debt
as good, bad or smart. Debt such as the mort-
gage on your own home is good debt because
it's a stepping-stone to wealth creation. Bad
debt includes credit card debt and personal
loans on depreciating assets such as cars.
Smart debt is negatively geared borrowings
on assets likely to appreciate over time such
as shares or investment properties.
value and for which there are no tax deduc-
tions,'' Heaven says. Until you get rid of bad
debt, it's impossible to make headway on the
smart or good debt in your life.
why we are in debt in the first place if we are
to prevent it from happening again.
and go out for a meal,'' Montgomery says.
"It's really difficult to keep that lifestyle up
so we'll supplement it with credit cards.''
it with our friends or partners, we even try
to hide it from ourselves. "We don't acknowl-
edge that the balance is growing, we just
honour the minimum payments,'' she says.
over the last three to six months. Look at
how much debt is outstanding, what the
interest rates are on those debts and how
much you are spending over and above what
you earn. The next step is to take action by
generating more income or reducing your
spending. "Those are the only ways you can
get out of this perpetual cycle of credit card
debt,'' Montgomery says.
debt into your loan as a way to pay the debts
off faster. The trick, however, is to add at
least what you are currently paying towards
your debts to your mortgage repayments. If
you don't have a mortgage, look to consoli-
date debts into a low interest personal loan.
Failing that, pick the debt accruing the high-
est level of interest and pay that one off first
before concentrating on the others.
all but one credit card, reduce its limit to
$1000, and work on changing your spend-
ing behaviour.
save $15 a week. Take away coffee may
seem like a small expense but the $375
you'll save in just six months will get you
this Pink Zebra cashmere cardigan.