“The next big problem we’re going to have when it comes to debt is ‘buy now, pay later’. We can see it across the board, across the water in the UK and in the US. We have troubles coming down the track unless we really start to get informed about what they are and accept that they are a loan.”
That’s the stark financial forecast from Irish Independent money columnist Eoin McGee on the latest episode of the Money Talks podcast.
As the new year gets underway, how do we get our heads together and manage our money, particularly if we find ourselves in a state of difficult debt?
Not to mention all the natural anxieties that accompany it.
This episode takes a look at one person’s tricky experience with debt and examines how it speaks to universal issues and learning curves.
“Identify the problem, then stop it getting worse,” says McGee. “Get rid of your ability to borrow – whether that’s credit cards, if it’s an overdraft you need to treat it like a loan. If you owe €500 in an overdraft, you need to say, ‘Right, for the next 10 months, I’m going to put €50 a month off that and I’m going to create a new zero’.
“For a lot of people, an overdraft is an interesting one because they go to minus 500, they get paid, they get through the month, they go back to minus 500. That’s your zero.
“You need to make your zero plus 500 over time, so that when you get to the end of the month you still have €500 or €1,000 in your account, or whatever it is.”
As for the argument that if you can’t afford to buy it twice, you simply can’t afford to buy it at all?
“For certain things, I totally agree with it,” says McGee. “There’s another way of looking at that, and it comes back to an emotional attachment to savings; if you have to use more than half of your savings for it, you shouldn’t be buying it.”
For the full conversation, check out the latest episode of Money Talks wherever you get your podcasts.
The content of this podcast is for information purposes and does not constitute investment advice or a recommendation of any investment product.