Sort Your Money Out. Glen James

a mortgage, banks and lenders will see these payments coming from your statement and use this towards any ‘credit profile’ they make of you, as I mentioned previously around credit scores.

While there are always the 1 percenters who have used Afterpay and Zip Pay to their benefit … blah blah blah … don't use this as an excuse to do the same. Stop using credit for crap and move on!

      It is worth noting that innovation is truly a wonderful thing and we are in the early stages of digital money and payments. There could be some cool payment feature or system that comes out of all of this stuff (but probably not) — so I'll give the innovators some grace here. I will not give grace to the innovators who pitch to me to try and come as a guest on my podcast to advertise an app that allows people to get their salary paid in advance daily. Commonwealth Bank of Australia (CBA) recently launched a product like this called ‘AdvancePay’. I thought it was a legitimate joke at first. Are you kidding me? Yikes!

      My point here is that when the motor vehicle was first invented it did not have seat belts. Regulators and society soon went out on a limb to say ‘seat belts are probably a good idea’. There was a lot of resistance and pushback from the motor vehicle industry at the time. And, well, the rest is history (and safer).

      In a submission to Treasury on the regulation of BNPLs, Afterpay stated the following:

       In summary, Afterpay is strongly of the view that the ASIC powers are not appropriate for the simple, no cost, short-term product offered by Afterpay which enables consumers to purchase retail goods or services.

      Lol!

Loans from family and friends

I don't generally love this idea as it can lead to relationship breakdown. But if you do go down this road, ensure you write down the terms on paper and sign it in front of witnesses with your family/friends. When drafting the terms, consider factors such as the time frame for loan repayment, the exact dollar amount owed (total amount and the agreed repayment amounts) and other accountability/terms (e.g. if the loan is not paid back within six months, the borrower must re-finance with a personal loan). Make sure both the lender and the borrower have a copy of the written terms.

Debt and mental health

      It can be tough out there and while we need to take ownership for our actions, I understand you might have been in a dark place for a season or you may still be going through a rough time. You may have racked up consumer debt because buying things is one way that you feel in control, settled or simply not depressed.

      For the ‘overspenders’, and particularly those overspending with debt, I ask you to pause and reflect. Why do you think you are overspending? Is it just sloppy mismanagement of your money and life or are you doing this almost on purpose because ‘it just helps’ or ‘it makes me feel better’? Only you can answer this. If you think your overspending (with or without debt) has been going on for too long and there might be an underlying mental health issue, I would encourage you to speak to your GP. It took me too long in my life to realise I had a problem with my mental health (depression and anxiety). Once I had sought treatment, I became a new person who was surprised to learn that ‘not everyone feels this way’. It is okay to not be okay. And it is okay to reach out for help.

      A final word

      on consumer debt

      Often, consumer debt is not the problem; it is just a symptom of something else. You have been the problem, most likely. Not the debt itself. I hope by reading this chapter that you are encouraged to make some movements to stop spending and to clean up your debt.

If anything, just decide that there will be no more consumer debt. Try and go for a day, then a week, then a month without overspending on credit. Then get your spending plan in place and then let's get onto the task of cleaning it up!

      And if you don't read on and you just want to focus on slaying your debt for now, I would be okay with that too.

      I need you to be hyper-vigilant when it comes to buy-now-pay-later products. At the time of print Apple have now entered the race with a rumoured ‘Apple Pay Later’, Pay Pal has also put their hand up and Square, an international payments platform, has announced their intention to take over Afterpay. The problem we have with this payday lending of today is that you don’t have to make a conscious effort to walk into a cash loans office – it’s already in your pocket. Be strong.

      resources

       Scan the QR code for these resources and more.

       If you’re in debt over your head and need help you can speak with financial counsellors at the National Debt Helpline on 1800 007 007 or visit www.ndh.org.au.

       If your debt is causing you emotional or mental distress, please speak to your GP about getting help. If you feel there is no way out and need help right away please contact Lifeline on 13 11 14 or visit www.lifeline.org.au.

       There is a great Facebook group for people who are getting their money on track, just search ‘The Glen James Spending Plan (GJSP)’. Ask the group how they have had wins with getting out of debt.

       Head over to my dedicated book website to download a debt snowball worksheet, some extra resources and if you think you want to speak with a financial adviser or money coach for extra accountability to help keep you focused!