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MONEY COMMENT
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In my very first month at the Fool, I wrote an article entitled The £818 billion Debt Gorilla, in which I fretted about 'easy credit' and rocketing personal debt in the UK. The article warned that credit growth was unsustainable and, eventually, higher interest rates will leave millions of us struggling to meet our repayments. Later that year, I wrote a press release about our appetite for debt, warning that we were heading for an extra £100b of debt during 2003. And, sure, enough, in the first eleven months of 2003, we borrowed £99.4b, which means that the year-end total will be roughly £110b. Apparently, I wasn't pessimistic enough! For the record, as at November 2003, we owed £757b in mortgages, £53b on our credit cards and £117b in unsecured loans, overdrafts and so on. That's a total of £927b, which means that - borrowing £9b more every month - the UK will have a trillion-pound debt by the end of August this year. This debt burden costs us around £5 billion a month in interest alone! A trillion pounds. £1,000,000,000,000. Twice what we owed in May 1997, just over than seven years earlier.
Thirty million working Britons earning an annual wage of £25,000 a year only bring in three-quarters of this astronomical sum - and that's before deductions for tax and so on. Let me put this another way: to run up a debt of £500b took us all of recorded history up to May 1997. I estimate that adding a further £500b will have taken us a mere 87 months more. Even worse, our total debt has increased every single month without fail since April 1993. Oops! Oh dear, I've no doubt that our borrowing spree is going to come to a sticky end. We cannot keep spending tomorrow's money today without paying a high price. So, why not take a personal stand against the rising tide of personal debt by visiting one of the areas below? You might just avoid the coming storm... More: Get Out Of Debt centre | Dealing With Debt and Living Below Your Means discussion boards.