Real-life money situation
“I have debt.”
I have debt. Debt is common and not a moral failing. What matters is its cost, its size compared to income, and a plan.
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Debt is common and not a moral failing. What matters is its cost, its size compared to income, and a plan.
What to think about
- Every debt you have: the balance, the interest rate, and the minimum payment.
- Which debt costs you the most each month in interest.
- Whether any debt is growing even though you pay it.
- What caused the debt, and whether that cause is still active.
Common first moves
- List all debts in one place — the Future tab in Finance can hold them.
- Keep paying every minimum, so no debt falls into late fees.
- Choose a repayment order (highest interest first, or smallest balance first) and put any extra there.
Watch out for
- New borrowing to cover old borrowing.
- Offers that promise to make debt disappear for a fee. Where debt feels unmanageable, a free, regulated debt-advice service in your country is a good first call.
Lessons behind this
- Interest: simple, compound and APR — Interest is the price of borrowing. How it is calculated decides how fast a debt grows. (8 min · Foundation)
- Minimum payments and debt traps — Paying the minimum keeps you current and keeps you in debt — sometimes for years. (6 min · Foundation)
- Repayment strategies and refinancing — Snowball, avalanche and the basic idea of refinancing — and how to choose. (8 min · Practical)
- The psychology of debt — How debt feels, how it affects decisions, and how it grows alongside lifestyle. (6 min · Practical)