Managing Debt and Taking Back Your Life
Dig past the pile of bills and collection agencies’ notices to read this piece on how to get out from under debt and breathe easy for the first time since you kept a balance on your very first credit card.
Whether you got into this situation by being a poor budgeter and spending frivolously, or you are the victim of tragedy such as a death in the family or a lost job, you’ll find something to help you reclaim your life below.
Dealing with Bad Spending Habits
If your problem didn’t start as income-related and you found yourself in debt due to poor spending habits, this section is for you. Follow the below steps to start digging your way out of financial burden.
- The first thing you must do is create yourself a budget. Don’t let your past spending behavior cloud your judgment, budget the necessities and one reasonable social gathering a week and then plan to use the rest to repay your debt.
- Second, check to make sure you’re not overpaying on council tax, over 400,000 UK households pay too much council tax, see if you can reduce this payment.
- Next it’s time to make progress paying back your loan. It is typically never a good idea to take out more debt to repay existing debt, but sometimes it makes sense to do so. For example, if your credit history is not yet compromised and you can get a credit card with little to no interest, it may be worth it to transfer higher interest debts to a new credit card. Also consider consolidating loans and other debts for better terms and one easy payment.
Dealing with Debt Due To Circumstance
It can initially feel very overwhelming to become indebted after losing a job or a spouse, but this is typically far easier to deal with than poor spending habits. There are government resources designed specifically for people in your situation. See below for resources to help get you back on track.
- If your household earns less than £73,000, you may be eligible for added benefits. This is especially useful for life-jarring changes.
- Get help with your mortgage by accepting interest payments on your loan to full mortgage takeovers from the government.
- Make sure you’re taking advantage of all grants and other support that the government, utility companies, and other creditors may offer to discount your monthly bills.
Putting yourself under financial restrictions can be hard but it is necessary. Not only will it help you lead a more fulfilling life, it will also help you protect your credit score and your loved ones from having to deal with your debt. If you are in debt due to unforeseen financial circumstances, be sure to check with your government benefits agency and utility companies to see if you may qualify for any grants or monthly bill reductions. Doing so could help you get on your feet in no time.