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Best finance tips for overcoming debt

13th May 2021 Print

Trying to manage debts can cause unnecessary anxiety, but the truth is that getting out of debt is achievable with the right tools and motivation. There is also plenty of help available, both online and in person, so you do not need to struggle alone. To give you a start, we have put together some tips to help you begin the journey to paying off your debts at your own pace.

1. Make The Most Of Your Budget

Putting a personal budget together is the essential foundation of any financial plan, but even more so when you are paying off debt. Write down your monthly income, essential spending, and savings, and determine how much you can afford to set aside to pay off your debts. Identify if there are any areas where you could save money to put towards your debt repayments and set yourself a budget to stick to. You should also try to automate as much as possible, so consider setting up direct debits for bill payments.

2. Consider Debt Consolidation

A debt consolidation loan UK can help you to merge your debts into one manageable sum, allowing you to pay off the amounts in one go, then repay to a single lender. This type of loan can help you to budget, potentially pay off your debts quicker, and reduce any stress you may feel around your finances. You may need a good credit score to qualify, so make sure you take the time to browse lenders to find a solution that works for you. However, it is crucial to remember that debt consolidation should only be pursued if all other options have been exhausted.

3. Understand Overspending

It is only human to treat ourselves every once in a while, but too many treats can lead to detrimental overspending. If you find yourself buying items out of boredom or breaking your own spending rules, you may be heading towards overspending. Alongside your budget, you should aim to break your overspending cycle by looking for ways to get more value. This could include cooking at home rather than eating out or switching bill providers for more affordable deals.

4. Determine Your Reasons

The main reason to overcome debt is to find yourself in a more stable, financial position, but you may have another goal that you would like to achieve. To keep a clear focus on your debt goals, it is important to establish why you are trying to get out of debt. Is there a car that you would like to purchase? Maybe you want to save for a new house? Perhaps there is a dream destination that you would like to visit on holiday? Whatever your goal is, define it and write it down to keep yourself on track.

Almost everyone finds themselves in times of financial difficulty at some point in their lives, so you must remember that you are not alone. If you require more help, please seek impartial support from the Money Advice Service.