Expat Debts: Repaying Your Debts Whilst living & working in overseas

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‘Every day I get up and look through the Forbes list of the richest people in America, if I’m not there, I go to work.’ – Robert Orben

‘Don’t borrow from anyone you don’t want to loan money to.’ – Doyle Brunson (2 times World Poker Champion)
‘The easiest way for your children to learn about money is for you not to have any.’ – Katharine Whitehorn

Do you owe money?

How much and to whom?

Do you have that sinking feeling?

The consumers (that is you and I) of nations like the US and the UK are drowning under a sea of debt. Personal savings rates have slumped whilst borrowings have risen dramatically. Much of this is due to the booms in house prices.

Average homes have risen so steeply in value that an ordinary family can ‘release’ equity every year or two to live beyond their means, repay credit cards and loans and still live well. However, the reality is that wages are not rising as quickly as inflation and as soon as interest rates leap into life again, these debts will become unsustainable.

As I write this in early 2012, interest rates in the UK have stabilised and US rates are increasing monthly. It will need more rate rises before the problems really start to show themselves, but whenever you are reading this, one thing is certain: you will be better off having lower personal debts.

When it comes to repaying debts, there are three issues to be addressed. The first relates to your lifestyle, how much you earn and spend, what your money is spent on and whether any cutbacks can be made. The second issue is how to prioritise your debts to repay them in the most efficient way possible. The last is to cut up your cards to prevent you from getting even further into debt.

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