My debt snowball

My debt snowball

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THIS is what happens when we get credit (see below).

You turn 18, and you apply for your first credit card, because that little leaflet you received through the post stroked your ego. ‘You’re officially a grown-up now! You’re working, and now you can apply for credit! And what’s more, you’ve been Pre-selected to apply.’ You read on to discover that this leaflet makes a lot of sense – you might face an emergency and a credit card would be really handy to have. Plus, you know, it would be nice to buy some new clothes and you’ll pay it off next payday… which you would, if you’d had lessons in money management and been educated on the dangers and pitfalls of credit cards (or, better yet, you’d not get one in the first place and would have savings for emergencies and a budget for clothes).

A few months later, you need a new car, and your parents suggest getting a car on finance. The theory goes that so long as you have a new car, you can ‘trade up’ each time you’re ready for a new one. Which isn’t really the case, thanks to depreciation and you ending up owing more than the car is worth, so with the next car you buy comes higher monthly payments. And what happens when the car gets written off? You still need to pay that loan, and now you have no car.

The story continues, and you reach your late thirties, STILL in debt and wondering why, despite being managed, (or is it?) you’ve been making debt repayments for over 20 years? It’s because despite making those repayments, you’ve been conditioned (along with the rest of society) to believe that having credit is a normal way of life and it’s the only way to get nice things. We live in a world of instant gratification and ‘I want it now’, and don’t realise the value of things. We don’t get that intense elation of having worked so hard to save up for and obtain something.

It’s time the world woke up to the damaging effects of credit, and time companies stopped pushing it on unsuspecting consumers. When all this is over, the only debt I plan on having is my mortgage.

This picture is what happened one Saturday morning while sitting crafting at the kitchen table with the kids. I knew in my head how much my debt was, but I needed it written down in colour. And I needed a plan.

So, this is my debt snowball. Let the momentum begin.

(3) Comments

  1. It is hard to believe that such huge amounts of debt have become normal and a number like your credit score, which reflects how well you can maintain your debt, classifies you. We are brainwashed as children to be in debt and it never ends.
    As always, great insight into the emotional aspect.

    1. Thanks Rio. It’s not good, is it? I myself have an excellent credit score but I don’t think that’s something to be celebrated. It’s potentially as bad as giving a gambler a free £10 bet, because you know once they start they may struggle to stop. I intend to stop now before it gets out of hand (and it could, at any point, due to unforeseen circumstances!).

  2. […] from relying on credit to get you out of a sticky financial situation), and now we’re using the Debt Snowball method with Baby Step 2. Once all the debt is paid off, I’ll be focusing on savings and investments. It’s my goal to […]

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