Byline: PAUL Chief commentator for Money Magazine
DEBT problems donCOt always have their foundation in over- spending.
A 2012 report by Wesley Mission found unemployment, illness and relationship breakdown were among the biggest causes of debt troubles.
But if youCOre facing mounting credit card debt because of uncontrolled spending, itCOs important to face the issue head-on.
Many Australians are channelling money into savings accounts, and thatCOs a good thing.
Nonetheless our credit card debt remains high. We collectively owe in the vicinity of $50 billion on our credit cards, and with card rates remaining stubbornly high, turning a blind eye to ballooning card debt is likely to leave you worse off further down the track.
ThatCOs because the interest meter is constantly ticking, and the sooner you take action the easier it can be to clear the slate.
Getting on top Co and staying on top Co of card debt often involves breaking bad spending habits and replacing them with good ones.
I often encounter the view that money problems would be solved if we earned a bigger income. Experience has taught me this isnCOt always a magic cure. We have a tendency to increase spending as our income rises.
Besides, relying on higher earnings in the future isnCOt much of a solution to a pressing debt problem today. What you need to do is take control of what you earn now.
One of the key tools for this is a personal budget. It will show exactly where your money is going. Or, if youCOre not keen on budgeting, try recording your spending for a month or two. It can be surprising to see how much money is wasted on minor purchases.
The real challenge in reducing card debt can centre on the way you view money and how you spend it. …