I get a lot of people coming to see me who have fallen foul of the credit card trap. It is sad to see because something that started out as a simple desire to have something now and pay for it later has ended up being a noose around their neck and a feeling that they are getting nowhere fast. The result is they begin to loose sight of their financial goals and ultimately their life goals because let’s face it most of our goals in life involve money in one way or another.
I would like to give an example of a client’s story so it might make it easier to relate. I have changed her name to protect her privacy and used this with permission
Ruth came to see me because she was 32 years old and felt like she was getting nowhere fast. She had started out fine and regularly put money aside for savings but just when she was about to leave on an overseas holiday (something she had been planning and saving for a while) her car needed unexpected repairs which meant that she had to tap into her holiday savings to pay for the repairs to the tune of $3000 and so she decided that she would use her credit card for her spending money as she wasn’t going to let her car problems rob her of her much anticipated and all paid for holiday of a lifetime. Anyway she would be able to repay the credit card as soon as she got back because she had got used to saving $200 per month for the last 15 months.
Things began to come undone when Ruth returned from holidays with a $5000 credit card bill instead of $3000 and the $200 that she used to save every month was taken up with the sudden need to vacate the apartment she was living in and having to pay what she would normally have saved in the extra cost of rent. Before long the 17% interest rate started to increase the debt at a greater rate than she could repay it and she only managed to scrape together enough funds for the minimum payment.
You will be pleased to hear that Ruth is well on her way to paying off her credit card debt and we have definite plans to get her started on a savings plan so she can have an emergency fund in place should anything like the car scenario happen again . We have also mapped out what her 2yr, 5yr and 10 yr. goals are so that she has a definite plan to work towards and she has begun the journey to a strong financial future.
If you would like to get started on your own successful financial journey please don’t think twice about contacting us here https://www.coachchris.com.au/contact/ We would love to meet with you for a complimentary first appointment where together we can have a look at your unique situation and get you back on track to achieving what’s important to you.