Money seems to be one of the hardest things in the world to get to grips with. It disappears so fast, you wonder if it ever really existed in the first place. If you are someone that lives from paycheck to paycheck or struggles with a mountain of debts in their lives, then you will know exactly what this feels like. It is as if money cannot stay still for two minutes.
Nevertheless, dealing with debt is no laughing matter. It can cause a massive amount of stress in your life, and it can affect every single other element of your world. It can cause problems in relationships, work, and can lead to depression. Managing your money troubles can be very difficult, but it is something that cannot be put off forever.
Face Up To Your Money Problems
If you are someone who suffers from severe debt, then you will probably dread the sight of the postman. When a letter slides through the door, the immediate reaction is not to open it because it is perhaps another bill that cannot be paid, or a letter demanding your debt be repaid immediately.
Don’t bury your head in the sand; these problems will not go away on their own. You need to get a handle on this situation before it causes you more grief than you can deal with. That means facing up to the situation and taking a good hard look at the situation at hand.
Work Out Your Total Debt
Sit down and calculate the total amount that you owe. When it comes to prioritizing, which should be paid off the quickest, look at the interest rates. The higher the rate, the more that the debt will cost you if you leave it too long. Debts on credit cards can last forever if you only make the minimum payment. Usually, that is just enough to pay for any interest that has been accrued that month. Credit cards are often an excellent place to start when it comes to picking which debts to tackle first.
Look at Consolidating Your Debt
You may want to see if you can take out a consolidation loan to bring all of your debt into one place. If you have a poor credit score because you have missed payments on some of your debt, you may find that you are rejected for an unsecured loan, and you will need to take out a loan using your house as security.
Guarantor loans may also be an option for you if you have poor credit. Buddy Loans are typically able to provide a response and money on the same day as application. Be sure that whatever loan you take out, you understand the payment plan and can afford to pay the set amount each month.
Go Through Your Personal Finances
By going through your finances, you will be able to get a clearer picture of where you currently stand with your income and expenditure. Start a spreadsheet and list all of your outgoings. Start with your high priority items such as your rent or mortgage payments, then work your way down to things that are less essential. Add all of these things up.
You will need to work out roughly, on average, how much you spend on food and transport each month. For this, you may need to look at a few months’ worth of spending.
Then, add everything up and compare it with the amount that you have coming in each month. Hopefully, you will have a lot more coming in than going out. If that is not the case, don’t worry because there are changes that can easily be made to help you.
Go Through the Details
With each of your outgoings, you need to ask yourself a number of questions. Firstly, is it essential? If something is non-essential, you may want to think about canceling it, at least until you are in a better financial situation. If you have lots of streaming services or gym memberships that you don’t have use for, then you may want to think about stopping them.
Secondly, can the item be made cheaper in any way? It might be that you could change to a cheaper supplier. For example, your gas and electricity bills could drop considerably if you were to switch to a new supplier. Often, when you take out a service or subscription, you may be sucked into a great introductory offer. Before you know it, the price has slid up. This often happens with insurance products and broadband deals.
Sometimes, you may be paying for something twice without realizing it. Your bank account may have additional features such as mobile phone insurance or breakdown cover added onto it. If you have these services taken out with other companies too, you should look at canceling them to save some money.
Get Help from a Professional Organization
If your debt problems are really getting the better of you, then you should look at the support that you have locally. There are many debt advice charities, and organizations such as Citizens Advice can be supportive and a great resource for signposting you to get help. It may feel be difficult to speak with someone as you feel ashamed of the mess that you have yourself in. However, these organizations are there to help you, and you should not worry about what anyone may think about you, as they will not judge you.
In some situations, it may be necessary to speak with the companies who you owe money too and agree on a way of paying off the debt given your situation. There are companies and charities that will do this on your behalf, and you might be able to repay the rest of your debt at an affordable rate. Debt management can be difficult, but with the right help, you can find your way clear of the worst of your money worries.