Stressed About Debts? Here Is How To Get Back On Track

Trouble with your finances can put a strain on all aspects of your life. Whether you have lost your job, suffered an unexpected expense or have had years of smaller debts snowball into a larger one, it is important to take the opportunity to act now before things get any further out of hand.

Debts can cause a lot of anxiety and even depression, especially if you have a family to support – here are a few ways that you can start to regain control.

Get some free debt management advice

Companies such as Carrington Dean offer free debt management advice which is tailored to your specific situation.

Realigning your spending habits can help you stay out of debt

When it comes to debt, there are so many nuances that every situation is different, so it is unlikely you’ll be able to find a one size fits all solution online – the best thing you can do is arrange an appointment with an advisor to talk through your specific scenario.

Ultimately, a debt management service will enable you to hand off the complicated conversations and arrangements to an experienced professional who will tailor a plan to ensure that your repayments are affordable for you.

Commit as much as you can afford to repayments

On the topic of repayments, don’t fall into the trap of sticking to the minimum repayments. If your circumstances change for the better, take the opportunity to increase your monthly repayments or pay off a lump sum. By doing this, you will clear your debt quicker and avoid the possibility of slipping back into debt in the future.

A couple are considering using a debt management service

Create a monthly budget planner and work out how much you have spare after your bills, groceries and luxuries have been taken out of your account – ensure that the amount you commit doesn’t put you under further pressure.

Debt management questions

Why is debt management important?

Debt management can be a crucial undertaking when you are faced with a series of debts, some of which you may be unable to repay. To get started with debt management and help your financial situation, consider getting some free debt management advice, commit to making the repayments that you can afford to make, and reassess your spending habits to be in a better position to save money.

Do debt management plans work?

Debt management plans can be an effective approach to helping you with your outstanding debts. However, not all types of debt can be addressed by debt management plans. Lenders generally help in the form of reduced interest rates, lower payments, waiving fees, however they typically will not reduce the balance that you owe on your debts.

Can I set up a debt management plan myself?

You can set up a debt management plan by yourself, although it is recommended that you first request some debt management advice before speaking with your creditors. To set up your plan, you would effectively have to make a list of all of your debts, and then get in touch with the respective lenders to negotiate the terms of your repayment, and then manage these debts by yourself.

Can I use a debt consolidation loan to help with debt management?

Many people choose to use a debt consolidation loan to help them get back on track. These can be very useful as there will only be one interest to pay off. Before going for this type of loan, be sure to find out how debt consolidation works and read up about the debt consolidation framework.

Get better spending habits

Debts can become a bit of a vicious cycle, so it is important that you realign your spending habits to ensure that you don’t fell into the same trap again. Start by assessing what you are spending month on month – aside from mandatory bills, what are you spending your money on and is there anything which you could forego?

Eating out and takeaways are a particular area where we spend a lot of unnecessary money, especially if you buy your lunch for work rather than taking it with you. Spend £3.50 a day on a meal deal from the supermarket? That adds up to £900 a year. Order takeaway once a week? You could be looking at £1,300 a year. Now consider how much cheaper it would be to make good simple food yourself at home!

If your circumstances change for the better, take the opportunity to increase your monthly repayments or pay off a lump sum.

Similarly, make sure you’re getting the best deal on your bills – use comparison sites to compare your utilities, phone contract, broadband and car insurance as there is likely lots of different ways you could be saving on these.

Finally, get a little more disciplined with yourself when it comes to buying your luxuries. Ask yourself “is it worth the money?” and “do I really need it?” to make sure you’re being sensible with your purchases.

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