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Subject: Debt Danger Signal

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debsbaker
Posts:111


08-10-2007 2:08 AM Alert 
There’s no need to stop spending for the sake of it. If you enjoy a cappuccino, can afford it, aren’t in debt and aren’t overpaying; sup away.[/quote]
 [/quote]
There are two ways to check if you’re spending more than you earn.[/quote]
  • The BIG Danger Signal. Are you in debt? If you are, and can’t answer the question 'what are your debts from?' there’s a problem. If you didn’t ‘buy a car or a conservatory’ but have simply used cards or loans to fill the gap; this rings an ear piercing alarm.

    Debt is fine if it is planned, rational, budgeted for and as cheap as possible; however if you consistently need to use the credit cards to supplement your monthly spend – you have a problem. Do that, and as I’ll explain in a moment it can have life destroying consequences.

  • Accurately assess your spending. If you are spending more than you earn, there’s a simple way to accurately check. Complete an Income & Expenditure form – honestly with your yearly income and what you spend your money on. It will tell you exactly how much more you spend than you earn.

    Most people are shocked by the result, as many of those who think they’re within budget month-by-month aren’t when it’s done over a year. This is the start point of sorting out your cash; if possible sit down, and spend the time to do the budget. The income & expenditure form also then helps you prioritise your spending. www.TIPConsultancy.co.uk or our document library section for your income & expenditure form

 


Kind Regards
Debbie Baker
Tip Consultancy - Financial Recovery Specialists
07790 533884
debsbaker
Posts:111


08-10-2007 3:13 AM Alert 
You may feel this is over-dramatising; yet when there’s no money left, you can’t borrow more, and the creditors are asking for money back which you’ve no ability to repay, it touches every element of your life.

The danger is what’s called a ‘debt spiral’. It works like this:
You spend more than you earn

You borrow to fill the gap

More of your income goes towards repaying debts

You keep borrowing more to maintain your lifestyle
The end result...

All your income goes towards repaying debt.

You’ve nothing left!

 

If you feel you are about to joint or are already in this spiral - ask for help!


Kind Regards
Debbie Baker
Tip Consultancy - Financial Recovery Specialists
07790 533884
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