Talking to a daily nanny in Surrey the other day, I was worried to hear her talking blithely about her 18,000 debt. 'Well, I just like shopping,' she explained, 'and if I'm unhappy I shop even more.' Like most people in debt she had an overdraft, credit card debts and a car loan and owed money on a store card or two.
Now, I happen to know that this nanny's net annual salary is only a couple of thousand pounds more than her total debt. But that still didn't seem to bother her. Not only that, but although she was able to pay her monthly bills, it had not occurred to her just how much money she was throwing away in interest payments. When I pointed out to her that at an average rate of around 17 per cent APR (Annual Percentage Rate) she was effectively flushing more than Pounds 3,000 a year down the toilet in interest payments, she did at least start to look concerned.
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