Debt is something that most of us have to face at some time or another. This blog gives a few tips on how to manage debt successfully.
Budget and plan in advance
Having a budget is the first step to managing any debt problem. You should write a list of your incomings and outgoings.
Sticking to your budget can be hard, but if you have some money set aside for emergencies or for unexpected costs then this will really help you to stay within your budget.
You can approach a professional debt advisor for advice if you wish, and this person will be able to help you budget.
The most important thing is to plan ahead. If, for example you have to use payday loan companies like www.wonga.co.za to tide you over in an emergency, then plan how you will repay the loan down to a T and stick to your plan.
Create a list of priority debts
There are some outgoings that are more important than others. The electricity bill and your phone bill for example are priorities as if these are cut off, you will have to pay reconnection charges and it may affect your ability to earn money to repay your debts. So, saving money by not paying priority debts is a recipe for disaster.
When you have a list of your priority debts drawn up, pay your other debts out of the surplus left over when your priority debts are paid.
Cut back on things you don’t need
When you are on a budget, cut down on things you don’t need, but don’t deprive yourself of things you know you will be tempted to spend money on. If you like to have a few drinks at the weekend, why not have a carry out or a bottle of wine before you leave the house. You won’t have to spend as much on alcohol in the bar where it is very expensive. Simple things like this can save you hundreds of pounds per month.
Negotiate with creditors
Creditors don’t bite! You should not be afraid to negotiate with them. You can ask them to stop applying late penalties to your account, and agree a monthly payment you can afford. This will give you some breathing space and some time to take stock of how to manage your debts in the future. It may be that you need a few months to sort out a new job or a loan. If you are genuine and upfront with creditors you will find them much easier to deal with. Make a list of your creditors and bite the bullet by contacting them. Writing to them is a cheaper option that calling particularly if you are calling from a mobile.
Find out whether you are entitled to benefits
If you call into your local Citizens Advice Bureau, you can ask them to conduct a benefits check to ensure you are getting any benefits you are entitled to. If you are on a low income you may be entitled to things like Housing Benefit and Working Tax credits. In any event, asking doesn’t cost anything!