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Nothing begins until debt dies

This would be a much better world if more married couples were as deeply in love as they are in debt.

— Earl Wilson

Debt is a right git. Once it’s got you in it’s filthy paws, it does everything to never let you go.

What is debt?

Debt is money you borrowed. An example is you take a loan to buy a product, such as a new shiny television. It cost £500, so you borrow £500 from a bank as a loan. You then have to repay that £500. Almost always, debt comes with interest. Interest is an amount of money, usually a percentage of the amount borrowed, that you pay to the money lender, such as a bank, as a reward for loaning you the money. Why else would they risk their money to you if they are not getting something in return?

For arguments sake, let’s say you borrow £500 with a 1% interest rate. You pay back £100 a month. After 5 months you will have repaid the £500, but the loan will still not be cleared as you also needed to pay the interest each month. So the loan of £500 actually cost you £501.25. Maybe that doesn’t sound too bad for the use of the money. But, remember, that’s only with a 1% rate. Try and find a loan for 1% and you’ll be looking for a needle in a haystack. Credit cards often charge 19% so in the same space of time you’ll have repaid £523.99. Store cards are around 29% so you’ll have repaid £536.82. And payday loans, which are only for the desperate and financially naive, can be 100%, so you’ll have repaid £631.66. Now you see the problems with taking debt.

Debt costs you money to repay. The deeper you drown in debt, the worst it becomes. People often end up so far in debt that they continue borrowing more hoping somehow this will help, but all it does is drag you further down. Debt can have a terrible impact on your financial life. If you begin to miss payments, default on a loan, then there can be serious implicates on you, such as you could go to court, you will ruin your credit score and not be able to get other forms of debt, such as a mortgage, resulting in you renting all your life, wasting money and having no home to pass onto your loved ones. Debt also causes stress. People often struggle to sleep at night, become unhappy, have friction between relationships, the list goes on and on.

So what’s the answer?

Level 1

The first thing you need to do is make a life long agreement with yourself to stop borrowing money. Write it down. Write it in anyway you want, but write something like, “I chose never to borrow again.” And then sign it. Yes. Sounds stupid, but sign it. No one will know.

The only thing that borrowing money has done for you is to get you into debt. You need to make tough decisions.

An example is you and your family have a summer holiday every year. You use debt to fund this. When next year comes you must sit down with your family and say you cannot go on holiday. You don’t have the money for it, and you are not willing to go into debt to fund it. Instead, have the holiday at home. Summer is a pleasant season in Britain. We often have hotter days than in Europe, so have the holiday at home. A day in the garden. A day in the woods. A day by the river or at the seaside. This home holiday will be so much cheaper, and if you put a lot of effort into it, everyone will have fun and won’t miss boiling, dusty Spain with tap water you can’t drink and uncomfortable beds and blistering sun-burnt skin.

Level 2

Once you’ve made an agreement to no longer go into debt, you now need to find out everything about the debts you have.

Who is the provider?
What is their email address and telephone number?
What is your account number with them?
How much debt do you owe them?
What is the interest rate on that debt per month?
What is the minimum payment you have to pay them?
How do you pay them? Direct debit, pay in a bank etc.

Once you have all that information, list each debt side by side and put them in order of the lowest amount of debt in the left hand column to the highest amount. Also when you’ve done this, add all the totals of the money you owe so you have one total debt figure.

Whatever the amount, small or ginormous, stay focused. Only someone poor with money would bury their head in the sand now and borrow more. That’s not you. You’ve made a pledge with yourself to never borrow again.

Level 3

Now make a life long agreement with yourself and choose to repay your debts in full, as fast as you can. Write it down. Write it however you want, but something along these lines, “I borrowed the money, so it’s my responsibility to repay it, in full.”

Now let’s look at how to repay it.

First of all we need to make some fake debt up for this example. Let’s pretend I’ve got the below debt.

Credit card A

Credit card B

Car Finance

Store card


In total I have £14,500.

Now I’ve made the pledge that I will never borrow again and I will repay my debt.

Option 1: Get help.

There are a number of organisations that help people with debt if they are struggling or can’t pay it. Best to discuss this with the Citizen’s Advice Bureau and they can offer help. I know nothing about these organisations so cannot comment.

Options 2: The Snowball Effect – highest interest rate.

Financially beneficial to your wallet. The debt to tackle first is the store card at 29%. The interest this creates is killing your financial self. You should pay the minimum payment on all of your other debts apart from the store card. On the store card you throw every penny at it until it is repaid. Once that’s done you move onto the next highest interest rate which is credit card A. Again, you pay the minimum on all other debts and throw as much as you can at credit card A. The plus point here is you are no longer paying off the store card, so whatever money you threw at that, plus the minimum payment you were paying on credit card A, now accumulates and you are hitting the debt with two loads of payments. Once you pay off credit card A, you move onto credit card B and throw all your money at that. And this snowball of paying off debt continues to roll picking up more and more money as you pay off another debt. You do this until you are debt free!

Option 3: The snowball effect – lowest owed amount first.

Option 2 is by far the best for your wallet. Option 3 however has great psychological power. Option 3 says forget about the interest rate, you’re already in bad shape. Go and pay off the smallest loan first. So rather than focusing on the 29% store card, you focus on credit card B at £500. For all other debts you pay the minimum payments, and you throw everything you have at credit card B. You will get this debt repaid quicker making you feel like you’re getting somewhere faster. It’s one less debt to worry about. And it’s one less debt generating interest. Once you’ve repaid the lowest amount, go for the next lowest, which is the loan of £1,500. You’ll be throwing all the money you were giving to credit card B to the loan, plus the minimum payment you were paying to the loan, so again, you’re hitting the loan twice as hard. Once that’s repaid go to credit card A at £2,500. And on and on until you’re debt free!

My favourite option is option 3. But it’s down to the individual. There are other things you can do to help repaying your debt.

The first is get an emergency fund.
The second is create, use and stick to a spending planner.
The third is call your providers and haggle, which is an additional option called option 4.

Option 4 – The haggle

Now you’re not a pushy person, you don’t like conflict, you’re easily sold to and couldn’t sell water to a thirsty millionaire. Don’t worry. The haggle isn’t like a stock market film from the 1980s. The haggle is this.

You call your provider, credit card company, loan company whoever, and, ever so politely, you tell them you want to review your terms with them. You tell a little white lie and say you’ve spoken to their competitor and they’ve offered you better terms. You say you’d love to stay with them because the customer service is so excellent. This will please the person answering your call. Life in a call centre can be pretty tough and they don’t often get compliments on all the amazing work they do. You say you’d like to stay, but you need a better offer. Before they can agree or disagree you state what you want. You want your interest rate to be 0% for X number of months. Go high. Don’t say for the next 3 months. I had a credit card with 39 months at 0%, just because I asked for it. And what’s the worst they can say? “No.” But what if they say yes? If they do you get 0% interest for many months meaning everything you pay to that provider goes off your principle debt and not as interest. If they do say no then ask them what they can do for you? If they provide a lower interest rate than you have now then take it. Anything lower is good. Of course read all the terms and conditions to this deal. But if it sounds good, then take it. Every little helps. If they say no and ask you if you want to cancel, you can tell them you have to pop out for a while and will ring back later. That way they don’t cut you off. Then you have a choice, you can go and try and find one of their competitors, tell them you have a debt with your current provider and want to transfer it to them, but only at 0% and for a long time. If they accept this offer, move your debt. If they don’t, can they improve what you have with your current provider? If so, take it, but read the terms and conditions. Even if you got 1 of your debts like this, it will be a benefit to you. If you got them all, that would be amazing.

And don’t forget, these providers want to keep you. It costs them lots of their money to acquire a new customer. You’re in debt for a reason, because previously you were poor with money. The provider doesn’t realise you’re becoming financially aware. You’re playing the game by their rules and you’re going to win.


Whatever option you choose, it needs to be right for you. The aim is to repay the debt and become debt free as fast as you can. You need to stay focused and disciplined. You need to constantly revisit the pledges you made of never going into debt again and repaying the debt if full.

On a side note, here are some great resources I’d recommend about debt:

Ready, aim, fire!

You must give a lot of thought to money and finances or you will have shortfalls and problems in these areas all your life.

— Brian Tracy from his book Goals!

At the beginning of your education to become financially aware, the first thing you need to do before you start planning & organising, before you build an emergency fund, before you create, monitor and stick to a spending planner, before you repay debt, before you get protection (life insurance, critical illness, income protection), before you focus on your pension, and long before you start investing, the first thing you need to do is set a financial goal or goals.

What is a goal?

I think most people understand what a goal is, but for my benefit, let me state it. A goal is something you want, which you don’t have now or you haven’t done yet. A really sexy goal, for this example only is, on Saturday morning, when I wake, I set myself a goal of cleaning the bathroom. Rock ‘n’ roll, right? Gonna live forever… in that germ free, heavily bleached bathroom.

Let’s set another goal. From today to 30th of September, I am going to run one mile a day in order to lose 3 pounds of weight.

Last one. Every Sunday evening, I will write two thousand words of a novel, which will result in one hundred and four thousand words after a year.

I think the majority of us set life goals without realising, such as cleaning the bathroom. A big portion of us set goals at work with our boss. We set goals at the beginning of the year and track them on a regular basis. Why? Well, that’s easy. Your company gives you money to do stuff. They want you to do the stuff that will help them. They want you to keep doing the stuff to help them by you staying on track, resulting in them getting stuff done by you. Elegantly put.

Oddly, I find I stick to my work goals much more than my personal goals. When I asked myself why, I discovered three reasons, which, when they were told to me ages ago, I thought the wisdom of some poor goal-training expert my employer hired for the day was chatting utter nonsense. But, in hindsight, it’s true. I stick to my work goals more because:

  1. I actually write them down and keep a copy of the goal
  2. I regularly check in/track how I’m doing against the goal
  3. I told one person (my boss) about the goal and feel I’ll let them down if I don’t achieve them

I want to be rich

You might have said this to yourself, or heard people say it, but how do you become rich? If you’ve said it to yourself, why aren’t you rich now? Try to answer the below questions.

How did Andy Murray win Wimbledon? How does my neighbour’s garden look so perfect? How did my employer become so successful? How did my doctor become qualified? How did England win the cricket world cup?

Answer: Goals!

All of the above had a clear goal, a target, something to strive for and achieve.
Yet with money, we never set goals. Why is that? We have these pie in the sky goals, such as become rich, own a mansion, win the lottery, but nothing concrete, nothing specific or measurable. Nothing we can return to monthly, weekly, even daily and keep financially focused.

A financial goal

A financial goal is the same as a work goal or a personal goal. You think what you want. “Want” is the key word here. Once you know what you want, then you write it down, then you decide whether it’s achievable, then you figure out how to achieve it.
Example of a financial goal: I want an emergency fund of £1,000.Another example: I want to pay off my credit card balance of £500.

Other financial goals

This list isn’t exhaustive, but some things I thought of.

Repay credit card debt
Increase credit score
Increase income
Build an emergency fund
Stop wasting money
Save for a house deposit
Repay loan
Understand tax
Retire early
Invest in the stock market
Reduce expenses
Learn how to create a spending planner (budget)
Leave your family financially free
Buy life insurance, critical illness and income protection
Stop borrowing from friends and family
Save every month
Pay for a holiday
You get the idea, right?

S.M.A.R.T. goals

Sorry everyone, I’ve gone all corporate. In the dreadful world of business there’s a concept of S.M.A.R.T. goals. It sounds rather pathetic like all the other acronyms, and it is, but actually, it’s not bad. It’s difficult sitting on this fence all day long.

Smart goals stand for:

If you Google them, or Bing them, haha, you’ll see different variations of the naming conventions for each letter, but they’re all the same.

Below is an example of a S.M.A.R.T. financial goal I did with someone I was money coaching. Their smart goal was to, “Save £2,000 by 05/04/2020 in order to begin building an emergency fund.”

Let’s do some groovy analysing here, shall we?

Is the goal specific? – Yes. It states an amount, a due date and a reason for doing it.

Is it measurable? – Yes. We can measure the amount of money relevant to the amount of time to save in.

Is it achievable? – Yes, but. This person who came to me for money coaching was dreadful with money. Yet they earned around the average UK salary, didn’t have any children or huge amounts of debt, still lived at home. So yes they could achieve it.

Is it relevant? – Yes. The person wanted to become financially aware. They were sick of living pay packet to pay packet and having nothing to show for a month’s worth of work apart from owning family and friends money.

Timebound? – Yes. Last day of the tax year, 05/04/2020.

The other financial goals the person had was:

  1. Repay debt (£2,500),
  2. Improve credit score from very poor to poor (It’s a slow process, but a good one).

Setting the goal(s)

You’ve got to find your want, whether it’s building an emergency fund, repaying debt, buying a house, retiring, whatever it is. Until you know your want and can produce a financial goal, you have nothing to aim for. It’s like getting in your car and just driving, it might be fun for a while, but you end up lost.

Staying the distance

Now that you have a financial goal, what do you do with it?

  • Put is somewhere where you see it often, could be on your phone, print it off and put it in your wallet, tape it to your kitchen cabinet.
  • Make scheduled appointments to revisit it. In the first two months, revisit it at least weekly. Then, if you’re sticking to it correctly, maybe reduce it to fortnightly. Monthly is too long. Remember these are short term goals, under a year. So fortnightly would mean your look at it at least 26 times in that year.
  • Tell one person. Don’t announce it on social media.
  • Track it. Every week, or every fortnight, track how well you’re achieving the goal, write down your progress.

When financial goals go bad

Occasionally, as you aim to achieve your financial goals, you might be not performing as accurate as you would like. There are a number of reasons for this, here are some of the common ones:

  • Your goal is un-achievable in your current state. This means you’ve set your goal too high. You will need to revisit your smart goal and make it achievable.
  • You’re not focused enough. This means you’re not ready to become financially free. You like the idea, like learning French, but you’re not committed enough. You maybe should change your goal. Reassess why you’re doing this. Like going to the gym, if you don’t want to go for you, then go for your family (guilt). Make your goal smaller. Maybe the size of it stops you doing it. Saving £100 is easier than £10,000. Then when achieved the smaller goal, create a second goal a tiny big bigger.

A financial emergency has happened

This is something like you lose your job, your boiler blows up, your car dies. An emergency fund will squash this and not impact your financial goal.

If you don’t have an emergency fund, yet, then there are two choices.

The first is you miss this week or this month’s contribution to your financial goal and you extend your smart financial goal by a month. Emergencies rarely happen, and often not twice in a year.

The second option is you make further sacrifices to keep financially focused on your goal. So if you drive to work and it costs £50 a month, you cycle until the next pay day. If you buy a tea and a croissant for breakfast every morning, that month you eat at home. You have a seriously frugal month. Plus, all that cycling and not eating crap will do wonders for your health. Why not keep it up and get healthy and save money? Double bubble!

No matter what happens, if you stay financially focused then you’ll weather the storm and continue to achieve your financial goal.

When you achieve that goal

There’s not many better feelings than achieving your financial goal. You worked hard, stayed focused and made sacrifices. You deserved to achieve it.

When you achieve the goal do a couple of things:

  • Give yourself a pat on the back.
  • For 5 minutes or so, analyse how you did it. What was easy, what was hard, where could you have improved, what would you do different now you have the knowledge and experience of doing it?
  • Inform the person who you told about the goal that you achieved it.
  • Lastly, either extend this goal and push yourself a bit further, such as you now save £5 more a month than you did, or make a completely new goal and use the knowledge from achieving this goal to your new one.


  • Financial goals help you to stay financially focused.
  • Without financial goals it is almost impossible to become financially free.
  • Financial goals can be constructed using a number of methods, S.M.A.R.T. goals are a good methodology, millions of office bods can’t be wrong, right?
  • Constant check in and tracking of your goals is needed, either weekly or fortnightly for short term goals.
  • Make sure you tell just one person about your financial goal so that you are held accountable.

Start now!

Someone is sitting in the shade of a tree today because someone planted a tree a long time ago.

— Warren Buffett

Start now. Don’t think about it. Don’t wait. Don’t check with your spouse or best friend. Don’t stall until payday. Don’t research every angle. Don’t put it off. Don’t procrastinate. Start. And start now.

Start saving now. No matter what your situation is, no matter how much debt you’re in. No matter how little your salary is. No matter what you need to buy this month. Just start saving now.

Call your bank, visit your bank, use your online banking or your banking app. If you don’t have a savings account or an ISA, just open one right now and set up a standing order, meaning money automatically leaves your account as soon as you get paid, and goes into your savings account or ISA.

Don’t know how much to save? Just start. Start with anything: 200, £100. £50, £20, £1. You can increase the amount later once you become financially organised. But just start. The sooner you jump into the habit of saving an amount every payday, the sooner you’ll be rich. Create the saving habit. Just start today.

And for those reading this that’s already done the above either months or years ago, then right now increase the amount you save every month. Move it up 10%, 5%, even 1%. But increase your contributions. You should be increasing your contributions regularly. Nudge your saving rate up by 1%. Live without that money for 3 or 4 months and you don’t notice it has gone. Then nudge it up another percent.

Rinse and repeat.

Start now!