"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."
"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."
Identify the financial problem and stop it getting worse by removing the ability to borrow. Treat overdrafts like loans and set a repayment plan; for example, if €500 is overdrawn, pay €50 monthly for ten months to reach a new zero. Make a goal to convert a recurring zero balance into a positive buffer of €500–€1,000 so the account remains in credit at month end. Avoid purchases that require using more than half of savings. Recognize that difficult debt produces natural anxieties and that practical behavioral steps can create lasting financial stability.
Read at Irish Independent
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