A few tips for helping with debt
Managing debt problems is very much like going on a diet: Most people don’t know where to begin, or don’t know how to keep it up, or go about it all the wrong way. They expect a magic cure all that will work really quickly with no pain and no sacrifice. However, like most things in life what a diet really requires is a bit of planning, a bit of common sense, and a bit of determination. It’s exactly the same when it comes to debt.
First of all, make a budget: Write out on a spreadsheet all your outgoings, including interest payments and everything else you spend every month. Be honest with yourself. There is no point pretending you only spend £20 on a night out with mates if you actually spend closer to £40 once you’ve taken into account the cab fares and the kebab.
Next, look at your income: Is it really enough to clear your debts AND support the lifestyle you want? Again, be realistic. Make sure you differentiate between what you really need, and what you can do without. No-one expects you to live without ever going out, or spending any money at all, but do you really need new shoes every month? Or a new phone every year? Clearing your debts should be priority one, everything else secondary.
Finally: Make an action plan. Decide what to cut from your outgoings the easiest, and start with them first. Then make sure you use that money to clear your debts. The more money you clear off, the less you’ll be wasting in interest the next month. Try it for a month, making sure you write down everything you spend, and how easy you found it. Make adjustments where needed for next months budget.
A few tips: Be aware of pitfalls. If you’ve budgetted monthly make sure you remember items like car tax or yearly insurance that will have to be factored it. Plan for birthdays/holidays, and other big events.
As I said above managing debt is like managing your weight, don’t expect quick gains. Stick to your new budget, and be patient. The money you save will build month on month to allow you to clear you debts.
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