Living in debt

As I mentioned previously, one of the most important things in my view to handling your debt is money management. Most of us work hard to pay our bills and although we may not have much left over we still feel that its our right to have a little enjoyment in life. Agreed everyone deserves some enjoyment but when you are in debt there is a careful balance you must perfect between wants and needs.

I decided to keep it simple for everyone I will produce step by step blog posts advising you what to do. This post will be step 1.

You need to sit down and work out your debt to income ratio. Chances are you’re saying to yourself ‘what on earth is a debt to income ratio?‘ but don’t worry because I will explain it. The basic principle of the idea is to compare how much you owe against how much you earn. For example if your monthly take home wage was £1,500 and your monthly debt repayment (such as mortgage, loans, credit cards) was £500 then you will device your take home wage by your debt total.

Example:
Monthly debt payments: £500
devided by
Monthly take home: £1500
= Debt ratio of 33%

Write this number down, this is the number you will be trying to lower or at least maintain in the future! If you want, you can go into more detail and work out the exact percentage each loan, mortgage etc is and aim to lower those. You can consider paying larger amounts on high percentage debts in order to lower them for the future.

Hi, my name is Debt Devil and since my teen years I have be living with debt and many of my friends are in the exact same situation. Having debt need not be a completely negative lifestyle, if managed properly then you can live comfortable with your debts under control. Most students will understand that a lot of the time being debt free is simply not a possibility, keeping up with study and living costs can be a nightmare and living without a loan can be near impossible.

To me, debt is simply something which needs to be managed carefully rather than completely cut out. Many of my friends worry far too much about paying off their debt immediately rather than staying calm like myself and keeping up with regular repayments while still having some moeny to actually live on.

Hopefully by reading my blog you will be able to manage your money better and live in peace with your debt!

Debt Devil