Debt can build up over the course of your life, and if you don’t take action to do something about it, it can become overwhelming. Thousands of people live their lives in the red, and if you’re one of them, it’s in your interests to regain control of your finances before it’s too late. Here are some tips for dealing with debt:
- Work everything out: The first step to managing a debt mountain is to figure out exactly how much you owe and who to. It’s important to be honest about this and factor everything in, allowing you to begin planning how much you need to set aside each month to make repayments. It’s also essential to put a full stop on further borrowing, which will only draw you further in to a cycle of debt, and let friends and family members know about your situation – it can be embarrassing, but you may find they are willing to help.
- Identify savings: Reducing your spending can be as simple as using a price comparison site to find out if you could be paying less for your energy, phone bills, groceries and other regular payments. Choosing the cheapest suppliers for everything can add to hundreds of pounds’ worth of savings every year, which can contribute a significant proportion towards paying down your debts. It is also worth reviewing your insurance policies and checking for the cheapest fuel prices in your area.
- Examine your assets: Many people who are in debt don’t consider the money they already have in their belongings, cars and even their houses. While it can be painful to sell a car, it can make a solid start to paying off debts. Similarly, if your house is bigger than you need and you’re paying a high mortgage every month, consider arranging a fast house sale to free up a large amount of cash quickly, and moving to a more affordable location until you’ve paid off your debts.
- Speak to an independent adviser: Charities like the Money Advice Service and Citizens Advice offer free, impartial advice on managing your finances, and can help you to arrange repayment plans – some will even contact your creditors on your behalf to explain that you are taking steps to make repayments. This can give you some much-needed breathing room, particularly if you are receiving payment demands on a regular basis.