I was listening to a doctor discuss how people often came to him for the magic cure – a solution to a problem that already exists.

He was speaking about how much better it is to avoid the problem in the first place. Many health issues can be avoided with the right balance of food, exercise and sleep. Basically it was looking at being proactive towards health instead of reactive.

Mortgages and debt can be treated very similarly. I would consider a person financially unhealthy when in addition to a mortgage there is also long standing credit card debt, hire purchases that have gone beyond their interest free period and other loans. People can get by for long periods on poor sleep, diet and lack of exercise but there is a real chance it will catch up on you.

Debt is much the same, you can often carry a lot of debt for a long time but it is eating into your financial health and any time off work or sudden expenses or rate rises can put you into significant trouble. Avoiding these financial pitfalls is not necessarily difficult, a simple rule is avoid any debt with interest rates over 10%.

If you have a credit card do not put more on it than what you can pay off at the end of the month; reduce your limits to manageable levels – it is fine to have a $1000 limit. Do not take on any Hire purchases which you cannot takeover before they revert to high interest rates. If you do not have the ability to do this buy a cheaper item that you can pay off.

Most of all if you are about to juggle short term debt consolidate it into your home loan and bump up your loan repayments so at least you are moving forward not descending backwards.