Top 10 debt management tips
If you are struggling with your finances, it can be a worrying time and there may seem to be no end to the cycle of debt.
Fortunately, however, there are ways that you can start to take control. The following tips should help:
1) Set a budget
One effective way to manage money is to set a budget. You can work out your budget by using our income and expenditure form to see where your money goes. You can download the form from the Income and Expenditure page of our website, which explains how to fill it in. If you are still unsure how to do so, one of our advisors will be happy to help.
2) Reduce your outgoings
Look at reducing your outgoings where possible. You may find that there are some luxuries that you could do without. For example, you could have monthly subscriptions or memberships that you are not using enough to be part of your monthly outgoings. You could also reduce your household bills by changing to cheaper providers. Our Solve and Save service makes it easy for you to find the best deals on household bills.
3) Get online to increase your earnings
Many people are making extra cash by using online auction or selling sites to sell unwanted goods. From clothing and shoes to furniture and electricals, people are always searching online for great deals, so why not make some money out of something you no longer use? If you don’t want to sell online, you could do a car boot sale instead or place a free ad in a shop window.
4) Check benefit entitlements
Check whether you are entitled to any benefits. Many people aren’t aware of their entitlements. Try getting in touch with your local Social Security office to find out more.
5) Settle your priority debts first
There are some types of debts that could cause serious consequences if left unpaid. Priority debts include your mortgage, rent, council tax, utility bills, water rates, Magistrate’s Court fines, taxes, VAT, and maintenance arrears; therefore you should always settle your priority debts first.
6) Avoid taking out any more credit
Avoid taking out any more credit until you have substantially reduced your existing debts. This entails not applying for any new loans, overdrafts, credit cards and store cards, as well as not adding to debts on existing credit cards or loans.
7) Shop around for the best deals
When obtaining credit in future, shop around for the best deals, and make sure that you can afford to repay the sum borrowed. Generally loans are a less expensive form of credit than credit cards. If you find that you have to borrow by credit card try to ensure that you can pay back more than the minimum amount each month. That way you will be reducing the debt rather than just paying off the interest.
8) Consolidate debt repayments into an affordable monthly fee
You could make debt repayments more affordable within your budget by consolidating debts into a more manageable monthly amount. An effective way to consolidate debt repayments is with a Debt Management Plan.
9) Seek professional advice
If you’re struggling to keep up with debt repayments, you should seek professional advice from a reputable debt management company, such as Baines & Ernst. We have a wealth of experience in managing debt and have forged excellent relationships with creditors – putting us in a strong position to negotiate more affordable repayment rates on behalf of our customers. In some instances – depending on the type of debt solution you choose – you could find that creditors will agree to write off part of the debt and freeze interest and charges. Additionally, our experts will be able to guide you through the options and find the right course of action to suit your financial circumstances.
10) Stick to your plan
Once you have decided on a method of clearing your debts, make sure that you stick to it otherwise your debts could begin to spiral again. Additionally, you could risk court action by your creditors if you default on any monthly repayments.
These pointers can help to set you on a course of effective debt management leading to an improvement in your finances.
By taking positive action you can begin to see an end to the worry of debt, and no more stressful phone calls and letters from creditors.