What do people REALLY NEED?

OK, so what do people "really need"? 
A smart phone perhaps or maybe a 55" TV ? How about a fast car, year we all love fast cars. Oh I forgot, all the money to buy them so we need a well paid low stress short hours job. Yeah that's what we all need.

In fact what we all need is shelter, food, warmth, security and perhaps company. We also need to be debt free. OK I hear you say, when am I going to be debt free? probably when I die which is the case for so many of us but it doesn't need to be.
Going back to what we really need, the shelter, food, warmth, security, company bit is really all we NEED but I am the first to say that 55" TVs are also important but we don't NEED the TV, we may WANT the TV but we don't need it.

Why is it seemingly important to get ourselves debt free? Simples, because if you owe someone some thing and this is mainly money then the product isn't yours until it's paid for whether that's your house on a mortgage, a car on HP or a full house of luxury goods on tick. We might be able to pay the bills when they come in each month but what if we lose our jobs? have a read of yesterday's missive below about being a Boy Scout and you will see the effect of not having a prepared mentality.

Only when we are debt free can we begin to be more secure in our way of life, well that's my take on it. 
What you need to do is SNOWBALL YOUR DEBT. I lay NO claim to this theory but it is widely held as a good way. So here is how it can work for you.
Say for instance you have 5 debts on credit cards and store cards etc without the big ones like the mortgage and car payments.

Say for instance your five debts are £100, £200, £900, £2000 and £5000 and you pay off the minimum each month to keep the card and shop companies happy.

What you need to do is find extra income from somewhere. If that means getting an extra job locally to your home then do it. You might only work 4 hours extra a month but even at minimum wage that's an extra £30 or there abouts. You could also sell off all your stuff in the house that you don't use but keep "just in case it comes in handy" It's called hoarding and I'll admit I am one of the best at it but if you can sell a few bits and pay the money off your smallest debt then you will save money in interest and also get rid of your debt faster.

For instance you pay £20 a month off the £100 debt. Forgetting about the interest for now, you have £80 left to pay so you plan to pay that off in 4 more installments of £20. If you do the extra 4 hours work and pay the £30 off that debt WITH your original £20 you can then pay that debt off in 2 months instead of 5.

Then you start on the next debt. In this case it is the £200 debt and say you were paying this off in 10 payments of £20. You keep paying this £20 as normal but you also have £50 from the 1st debt made up of £20 payment and the extra £30 you earned. So the next monthly payment will be £30 plus the £50 from the first debt or £80 in total. So again you pay the second debt off in a little over 2 months instead of 10 !!
The third debt of £900 was 30 monthly payments of £30 but by snowballing the debts you pay the £30, the £20 from the second debt and the £50 from the first debt. All totalled up you pay the £900 debt off in 9 months of £100. This carries on and on until you pay off all the debts but the VERY IMPORTANT part is not to take on more debt to replace the debts you are removing each month.

Secondly do we need to spend £1000 a month on food or do we want to show off to our fellow shoppers and neighbours that we can spend such money if we want to? A man need about 4000 calories a day with hard work like an outdoors job or about 2400 for a more sedentary job like an office job.A woman needs about 3000 calories, again for a physical outdoors type job and 1500 for a more sedentary job so do we need all the butter, cream. salt, sugar and ready meals and eating out or can we learn to cook wholesome nutritious food at home that we can enjoy THAT IS HEALTHY for us to eat.

If you decide that you can cut back a bit on your shopping bill then the average money saved could go towards the mortgage because you have already paid the debts of haven't you??

Warmth, we all like to be warm but do we actually need to have central heating on in every room and at a temperature of 80 degrees F or about 23 deg C? why not put the heating on a timer for an hour in the morning and a couple of hours in the evening especially if you are out at work all day and then only have it set to 20 Deg c with the aim of reducing it to 18 Deg C / 35 deg F. Again money saved on your bills can go direct to your debts and if you do this well enough then you will get to be debt free before you die.

Security is also paramount and shouldn't be skimped on to save money but it can be done cheaper. If you have a garden then put a spiky hedge in place around the perimeter fence. Put low energy lights on a timer in different rooms at different times of the day. Play a radio or TV the same way and if you want get a dog. the bigger the better but make sure you can look after it well.

Hopefully that has given you a bit to think about and if you would like to comment then please please do. If you have any ideas that you want me t cover in future blog posts then please also leave a comment.

For those living on the edge and not wanting to fall off it!!

Take care Alan.