Having a good education is hugely important because it allows you to reach higher salary brackets. It is society’s meritocratic way of paying you back for all those years of absorbing convoluted texts for your GCSE and A-Levels at school and, in between parties and drinking games, at university too.
Well, at least that’s what your parents may have told you or what you were brought up to believe.
However, it doesn’t explain away the number of very highly-paid individuals who are struggling to meet their bills and debts at the end of each month.
The most important thing that we must learn when it comes to finances, is that it’s not obtaining an education itself that helps us with our money, but being educated about money.
How it works, how to spend it wisely and how stay out of debt are the real life lessons that we need to grasp – and the earlier the better.
Deep in debt
Being stuck in a downward spiral of debt is certainly undesirable on all levels, yet many people don’t understand how debt works and naturally assume that if they are repaying their debts that the outstanding balances will eventually go away.
People usually find themselves in debt because they have simply spent more than they earn and have tried to solve the problem by borrowing to fill the gap, which essentially means that more and more of their monthly wage goes towards repaying debt, establishing a pattern of cyclical debt that is not ever properly repaid.
Watch your borrowings
Everyone has heard the traditional debt advice which recommends that no-one should ever borrow their way out of a debt problem. Yet the key here is ensuring that you’re not borrowing more than you have to in order to get out of debt.
Simply, if you are able to borrow cheaply elsewhere then do so immediately, so it’s worth shopping around to see what offers are out there. With lower interests, this means that more of your repayment goes towards reducing the actual debt as opposed to paying off interest.
Budget, budget and budget
It’s absolutely mandatory that you draw up a budget and reduce your outgoings. This means being more of a smart and savvy shopper. Look into good bargains and deals, coupons and offers. All it takes is some basic arithmetic and putting some time aside to cull your monthly outgoings.
Check your benefits
A collective household family income under £66,000 may be entitled to some form of benefit. And you can do a quick check up for free in just five minutes.
Need help paying the mortgage?
The government offers various schemes specifically to help mortgage holders who are struggling to make their monthly repayments. These schemes range from enabling eligible holders to receive benefits to pay the interest, to a full rescue programme where the local council buys some or your entire home then rents it back.
Can you earn more?
Times are tough, of course we know that, but it doesn’t mean there aren’t opportunities out there. Whether you can change jobs now, take on extra work in your spare time or undertake a distant learning course to boost your earning potential, it’s clear that upping your monthly income is a brilliant way of achieving greater financial stability.
Also, what many people consider their “necessary” expenses amount to little more than selfish desires. Making sacrifices is character building and good for discipline – who needs to drink, smoke and order takeaway food for example? We live in a world where we have bought into the illusion that owning possessions and indulging ourselves on a whim is a way of feeling in control.
How sad it is that these misconceptions have lead the desperate into so much debt that they resort to taking out those dreaded payday loans advertised on TV.
The only debt I have is student debt. Thankfully it is a cheap debt.