Dealing with Debt
No one likes the feeling of being in debt, but sadly it’s something that many of us Brits have to deal with. According to a recent survey by MoneySuperMarket, Britons owe a total of over £196 billion in debt. Half of people in the UK owe some amount of money on a credit card and 23% regularly find themselves creeping into their overdraft. So if you’re one of the many who owe money to a credit card company, the bank or even a friend, what can you do to make sure you stay on top of it all?
It can be very daunting attempting to tackle debt when you’re faced with a huge amount so first of all, it’s important to break your debt up into more manageable chunks. A debt calculator is a great way to help you to do just that. It works by collating all your debt into one place and figuring out how much you’ll need to set aside each month in order to pay back your debt. Hopefully, it’ll help you realise that paying it all off isn’t as difficult as you first feared.
So you’ve worked out how much you need to pay each month but what do you put it towards? You’ve got a credit card bill mounting, the mortgage to pay off and you’re friend is starting to ask questions as to when it is you’re actually going to pay them back by. You might be tempted to pay back your friend first but your landlord is probably going to be a lot less understanding than your best friend. Similarly, it might seem easier but avoid paying off the smaller debts first and think about what debts need to be prioritised. Before you take any action, speak to your financial provider.
Next, it’s important to work out a budget. You don’t want to find yourself having to cut into the money you’ve put aside to pay off your debt just because you overspent at the beginning of the month. Start by looking at all of your outgoings. You might surprise yourself with just how much money you spend on certain items, for example food and groceries. If that’s the case, try and be frugal where you can by bringing in your own lunch to work or doing your weekly shop at a cheaper supermarket. Where they may seem like small changes, you’ll be surprised at how much you can actually save.
Tackling debt is all about having a plan, staying positive and not ever letting yourself feel like you’re in a hopeless situation. Getting a better picture of how you stand with your finances and making sure that you’re thinking a bit more about sensible spending can help you tackle your debt.