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Jason Butler

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Jason Butler is a chartered Fellow of both the Institute for Securities & Investment and the Personal Finance Society. He is a global financial wellbeing expert, angel investor, au...

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How do my finances affect my wellbeing?

Well, money and wellbeing are inextricably linked because if you don't have any or enough money, life can be pretty miserable. And if you haven't got enough money to meet the essentials of life, then clearly it's going to affect you mentally and physically.

How do I get out of debt?

There's no magic to getting out of debt, but there are some principles that you can follow. First of all, just stop borrowing money. Now, I know it's easier said than done, but if you say to yourself is debt is not an option, then you have to start thinking about another way, either by not spending, spending less, or earning more. Once you stop borrowing money, that is the first step. The second step is then to build some savings. Now, it sounds a bit counterintuitive, but just to build a small buffer, perhaps a thousand pounds or a thousand dollars or a thousand euros, whatever it is that you need to break your reliance on debt, and from then on, you then need to focus on getting really, really hyper intentional about getting rid of the old debt that you've built up, and that's going to require you to be really intentional about your spending. It's going to require you to possibly increase your income, and probably a mixture of those two things.

What is the difference between good and bad debt?

Well, I'm of the opinion there's no such thing as a good debt because debt is something which weighs you down. It's a payment, which is like a tax on your income. However, there is some debt that's not as bad as others. So give you an example where you borrow money to buy a productive asset or something that you would need anyway. So an example would be investing in your education to improve your income earning capability or buying a house that you need to live in anyway. And therefore the cost of the mortgage is the same or if not less than renting. That's an example of a good debt because the asset that you are using with the borrowed money is hopefully going to go up in value or have an economic return. Bad debt or worst kind of debt is where you are using borrowing. You're borrowing money to buy things that are just for consumption. Whether you need them or not is not the point, but they don't have any value. So an example would be borrowing to go on holiday. Yes, you might have the emotional experiences of the holiday and perhaps having some time to relax, but the holiday's then gone and the money that you spent on it is still there hanging around a bad smell. And that's an example of bad debt.

What are the different types of debt?

What financial support is out there?