Sometimes we need to take on debt to carry on functioning e.g. washing machine stops working and needs to be replaced. Many people take on debt to pay for wants though … and this can be a bad thing.

It’s easy to get into debt, but can be so much harder to pay it back! Think carefully before you sign up for debt!

Temptation is all around us

Delaying gratification is something many people find hard to do - we’re only human. In fact, instant gratification is the default by nature. Our desire for instant gratification has a close connection with debt e.g. we want a new phone now, but cannot afford to pay cash for it, but we can easily get finance for it. Easy!

Getting bogged down by credit cards, finance and retail loans is an easy trap to fall into. Retailers especially, make it very tempting to ‘buy’ things on credit. In many cases, you can also end up paying high interest and fees.

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Having the willpower to save will give you so much more satisfaction in the long run compared to taking on debt. You’ll get a sense of achievement and will obviously save money on interest and fees.

If you can’t afford to save up to buy something, you probably can’t afford to pay it off.

Do you have a Savings Plan?

Creating a Savings Plan makes it easier to decide which are the most important things to save for first and how to do it.

Once you have a Savings Plan, it’s a good idea to set up an automatic payment into a separate savings account (or multiple savings accounts). It’s best if the money goes out as soon as each pay comes in - you’ll miss it less that way.

Emergency savings - expect the unexpected

Everyone encounters the unexpected at some stage, so it’s good to have money set aside for when it happens.

You’ll see quoted “have the equivalent of three months pay set aside”. Wow! We understand that is a really big ask for most people. The key thing is to put a little bit of money away every payday into a separate savings account. Having money set aside will give you the peace of mind of knowing that when life throws you financial ‘curve balls’, you don’t need to worry.

If you do need to dip into your savings, start topping the account up again as soon as you can.

Getting on top of debt

It’s great to have financial goals - staying out of debt will make it easier to achieve them.

If you’re in debt, credit and retail loan interest rates are usually much higher than savings interest rates, so it makes sense to pay debt off first and as fast as possible. But if you can, keep putting a small amount of money into an emergency fund every payday.

Falling behind in repayments can also mean you’re hit with penalty interest rates and/or extra fees. That can create more stress, which could then affect your relationships, physical and mental health – that’s also too high a price to pay.

People sometimes joke about ‘retail therapy’: shopping to try and feel better, but it’s just throwing good money after bad.


Living from pay to pay can be really stressful. Aim to build up extra savings that you keep aside just for urgent bills and unexpected events in your life. Put aside a little every payday.

Do you have High-interest Debt?

To help you pay off short-term, high-interest debt faster, Love My Money has simple yet powerful online tools, calculators and Journeys, including the ‘Get on Top of Short-term Debt’ Journey.

Find out how you can have a better relationship with your money: