Alison Hunt looks at some of her husband's financial mistakes. Make sure you don't follow his example and then you'll be less likely to be hit by debt problems in the future.
They say that when you live with someone you start to turn into them, and that certainly seems to be the case in my house. After years of living a flagrant, free-spending bachelor life, driving fast cars and frittering money like there's no tomorrow, my husband has now fully settled down into family life and not only knows where his money's going, he now even advises his friends on how to get the most from theirs. Very Foolish!
The thing is, as you've probably guessed he wasn't always like this - and even now makes the occasional mistake. So here are a couple of the lessons he's learned over the years:
Lesson 1 - Check the card you use carefully
Having taken out a 0% credit card for new purchases, with an additional card so we could have one each, my husband and I were feeling really smug. After all, by putting all of our spending on the cards and stashing that cash in a high interest savings account we were making lots of lovely free interest - and as our 0% period lasted for a whole year we worked out we'd be able to afford a fantastic treat with the bonus cash!
If you have any debts on credit card, transfer the balance to a 0% balance transfer card so that all your repayments go to paying off your debt rather than extortionate interest rates.
At least, that was until one fateful night when my husband was out with friends and needed to take some money out from an ATM - and instead of using his debit card, accidentally used his credit card instead (and yes, he also didn't spot his error as he used the same PIN for each card).
Unfortunately, as this credit card operated negative payment hierarchy (i.e. any payments made went towards the cheapest debt first, namely the 0% borrowings) there was no way we could avoid being charged interest on this cash withdrawal. Our interest earned was therefore reduced and so our well-earned treat had to be drastically downsized.
Moral of the story: Never, ever withdraw cash with a credit card - and make sure you have a different PIN for each card!
Lesson 2 - Pay your credit card bill on time
Another thing all good Fools know is if you have a credit card, make sure you pay it off on time. If you don't even make the minimum payment you'll be stung with charges and interest by your lender in double quick time.
Unfortunately, my husband forgot to set up a direct debit with his credit card provider, meaning that the bill was not paid on time and a £25 fee, plus interest was slapped on the account.
Moral of the story: The safest way to make sure you never miss a bill payment is to set up a direct debit with your credit card provider as soon as you take out the card. Alternatively, make a note in your diary/PDA as soon as your bill arrives to pay it as soon as it's due!
So take note of these useful lessons and hopefully you can avoid having to learn them first hand too. And of course, I do realise that I'm just lucky that my husband isn't a writer and able to spill the beans on my misdemeanours, too (although I suspect I may just find some leaked onto a Foolish discussion board one day!).
And if you are in serious debt right now, take a look at the box on the right hand side of this page which has some Foolish debt-fighting tips. You'll also find much more advice and information in our Get Out Of Debt centre.