Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk

5 Tips to Help You Get Out of Debt

Not all of us excel at finance management; in fact, it may so happen that you’re in some serious financial difficulty. That can be terrifying, but there are things that can make you feel better. First, remember that you are not the only one. Unfortunately, plenty of us have been in your exact position before. Second, just because you’re struggling now doesn’t mean you can’t get out of this situation.

In fact, there are numerous tips you can employ in order to not only improve your financial situation, but get out of any debt you may have, learn to live within your means, and maybe even save some money for rainy days!

1. It All Starts With Budgeting

Perhaps the most important financial tip you will ever receive is to create a budget. And then stick to it. Most of us probably struggle with spending too much money, but the problem is that we don’t realise it, and don’t really do anything to curb it. So, the secret is to start thinking about it. Here are the steps you cn take:

  • Figure out how much money you make in a month
  • Figure out how much money you spend in a month
  • Figure out how much money you want to spend or can afford to spend in a month reasonably

Once you know how much you can spend in total, you can move on to figuring out how much you can spend on each category: groceries, rent/mortgage, transportation, extras, etc. Citizens Advice has some great advice regarding budgeting.

2. Use An App

Of course, it may be that you will need some help to actually stay on track with your budget. It’s easy to talk the talk, but more difficult to walk the walk And if you do find that you could use a helping hand, then maybe consider using a budgeting or personal finance app.

The beauty of personal finance apps is that you can find one for your specific needs. If budgeting is your issue, or saving, you can find something tailored to your needs. A lot of them have a feature that tracks your spending and shows you exactly how much you spend and where. That helps you determine where you need to cut back. The Guardian offers some options.

3. Pay Off High APR Debt First

One of the primary reasons for financial difficulty is debt. There is nothing to be ashamed of, and the sooner you address the issue, the sooner you will be able to leave it behind. A lot of people don’t realise, but before you can tackle any other financial aspects, including saving, you need to pay off your debt.

And you should start with the accounts with high APR first. That is because all the money you save and any interest you get is going to go on the interest you end up paying on the money you still owe. You can get help with paying off debt from GOV.uk.

4. Contact Your Credit/Mortgage Suppliers To Renegotiate Terms And Interest

Did you know that you can actually get a better deal on your loans, credit cards, and mortgage? You don’t have to stick with the terms you originally agreed to when you started the contract, and especially if your interest rate is a bit high, you can always call up your suppliers and attempt to renegotiate your terms.

This is also a very good idea if you find that you are unable to afford to pay your regular instalments or are falling behind on payments. Banks will work with you and your budget to help you make it more affordable for you to repay. They are as interested in you making the repayments as you are.

5. Seek Help From Professionals

Another very important piece of advice that you may not have realised on your own is to seek help from professionals, if you feel like you need it. A lot of people are unaware, but there are special institutions and services that offer free financial advice to people who need it. That includes advice on saving, paying off debt, declaring bankruptcy, refinancing, purchasing a vehicle, etc. Step Change is one of the sites offering free debt advice!

All in all, while you may fall into financial difficulty, you don’t have to stay there! There are several things you can do to improve things, so review these tips and see how they can help with your specific financial situation.

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