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Managing debt

Managing Debt:
Ideas for Debt Help

The word 'debt' can bring about very strong feelings in people.  Some debts we are comfortable with, such as a mortgage.  Other debts can be worrying and give us sleepless nights.  If we have lost control of our credit card spending, we can find ourselves worrying about how we will make even the minimum payment, let alone pay it off altogether.  The best way forward if you are struggling with debt is to seek some debt help on managing debt.  The worst thing you can do is to ignore what you are experiencing; the sooner you take a positive step forward and look for debt help solutions, the faster your situation will improve.

Here are some ideas for taking control of your finances and managing debt:

1.  Seek free professional debt help advice. 

The Citizens Advice Bureau can help you decide what the best course of action is, as well as steering you towards the people who can help.  Debtline is another good source of information; its website contains budget information and sample letters to send to creditors if you need them.  Even the act of contacting one of these debt help services can improve your situation immensely, as you will approach it with a much more positive frame of mind.  It also helps to educate you about how to move forward and start managing debt.

2. Prioritize your credit card debts. 

Managing debt also means writing down how much you owe on each card and finding out what rate of interest you are paying on each one.  Work on paying off the one with the highest rate of interest first – even if all you do is make the minimum monthly payment on the rest.  This applies even if you have another card which only has a small balance on it.

3.  Create a detailed budget to work out where your money is going. 

A budget will help to tighten up any areas where the money tends to slip through your fingers.  One prime example is eating out for lunch instead of taking your own to work with you.  When managing debt, work out how much cash you could save each week and put that towards paying off your highest credit card balance.  Look for other ways to tighten your belt too, such as changing from a contract phone to a pay-as-you-go one.

4. Consider using 0% credit card deals.

This debt help tip can work if you are only in debt for a relatively small amount of money.  You will be charged a transfer fee for doing this, but it can often work out to be less money than you would pay in interest by staying with your current card.  Resist the temptation attached to having a new card by cutting it up as soon as you receive it.  Use it only for the balance transfer.

5.  Work out which debts are the most important. 

While we tend to think of credit cards as being the cause of most of the debt problems in the UK, this is not necessarily true.  Some people fall behind with paying other bills as well, and in this case, it's vital that you are proactive about managing debt in order not to experience any further problems.

Your mortgage is a good example.  As a general rule of thumb, make sure you prioritize any bills which need to be paid to keep a roof over your head.  Mortgage or rent should come first, followed by council tax and utility bills.  Don't shy away from getting in touch with the relevant companies if you are experiencing problems; talk to them so you can work out a solution for managing debt.

6. Don't get into any more debt. 

This might sound obvious, but it's surprising how many people don't attempt to solve their debt problems and get even deeper into trouble in the process.  If you don't like to look at bills when they come in and you keep on spending even though you know you can't afford to, it's time to face up to things and figure out how to pay what you owe.

How you deal with debt depends largely on how much money you owe, and who you owe it to.  A debt of £1000 is very different from a debt of £100,000, for example, and may require a different approach to clearing it altogether.

However much you owe, adopting a positive attitude towards managing debt is the first and most important step you can make towards solving your problems and paying off what you owe in full.  It can seem scary at first, but the debt help process is actually very empowering, and it can help you to improve your finances from today onwards.

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