Distinguish between debt that buys an appreciating or income-producing asset and debt that funds consumption. High-interest consumer debt is the most urgent financial problem most people have.
Part 01
The lesson
Deal with it by listing every debt with its balance and interest rate — not from memory. Then choose a consistent method, either highest interest first for cost or smallest balance first for momentum, and stop adding to it.
Reflection
Questions to sit with
- 01Do you know exactly what you spent last month, or are you estimating?
- 02If your income stopped today, how long could your household continue?
- 03What are you actually building toward financially, and by when?
Put it into practice
Action points
- 01Track every expense for 30 days and categorise them at the end. Do not change your spending in week one — just observe.
- 02List every debt with its interest rate on a single page and choose a repayment order.