Debt Free by 50

An interesting survey on personal finance was done by Your Money Matters recently. It revealed that on average we Brits owe on average £10,000 each in personal debt, which will only get paid off by the time we reach 50.

We seem to have a real problem with saving for luxury or on-off items and at the same time want more and more. So how are we paying for these non-essential items? We take advantage of the easy credit that is available. Or maybe it's more that the lenders are taking advantage of us.

As banks and building societies make it easy for us to get credit in the form of overdrafts, credit cards and loans, we feel justified to take what's on offer - whether we should or not.

In an increasing changing world, our attitude towards material things is becoming a vicious cycle. Consumerism has escalated over the past few decades. We borrow to buy something we feel we need, we then spend the next 5-10 years paying that back, but at the same time we borrow more to buy more things, so our debts escalate and it takes us longer and longer to get out of it.

As the survey showed, it will take us up to the age of 50 years and 2 months to clear our unsecured loans. So what do we use these borrowings for? A proportion of the debt covers our student loans. The rest includes overdrafts, buying cars, furniture, furnishings, white goods, electrical gadgetry and computers. it doesn't even cover cost of buying our house.

Women seem slightly better off in the equation and owe on average £8000 whilst men seem to rack up on average a total debt of £12,000.How do we pay off these debts? A variety of ways helps us get rid of this debt. Our salary, our savings, any inheritance, lucky wins or investments can help us chip away this stone around our necks.

As living costs and house prices increase way over what our salaries average actually are, you can see why we are getting into debt. But it is unlikely that any of these factors will change. The only thing we can do is change our attitude towards paying for things with easy credit and teach our kids not to make the same mistakes.

Some tips to staying free of debt include;
* Avoiding store cards and credit cards especially for everyday items.
* Setting yourself a weekly or monthly spending budget and stick to it.
* Organise your savings and use your yearly tax-free allowance with an ISA.
* Visit a financial advisor to discuss the best savings, investment and pension plans for you.