Why it makes sense to sort out your debt – and a few ways to get it done

debt and how to tackle it

Debt is a big problem for a lot of people. Particularly in the UK. On average each household has £15,000 or non-mortgage related debt. Servicing that debt, interest and other fees can soon swallow up a high percentage of your income. Wasting money in that way means that you can’t enjoy the finer things in life as much as you would like. You just can’t afford to book yourself that stress-relieving spa break, or the family getaway you desperately need. So, getting out of debt makes a lot of sense. It might feel daunting, but if you take some first steps it can be easier to sort out your debt than you think.

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Seek help if you are overwhelmed already

If you owe a lot or have so much debt that you cannot keep up with the repayments it is important to seek outside help. Firms like Creditfix can help you to arrange IVAs, trust deeds and as a very last resort can take you through the bankruptcy process.

In fact, even if you have not reached the stage where your debt has overwhelmed you, seeking advice may not be a bad idea. Reading articles like this one is helpful. But, speaking to someone who has been helping people to manage their debt for many years is better still. They know the ins and outs of the various options, in detail.

If you live in the UK, you can use the Citizen’s Advice bureau to get free independent advice on how to handle your debt. You can read more about how they can help you by clicking here.

Identify what you owe

Before you take either of the above steps, sit down and work out exactly how much you owe. It can be a daunting task. But, once it is done you will know for sure where you stand.

Anyone you go to for help is going to ask you how much you owe and to whom, anyway. So, it is best to have that information at hand.

If you discover that you owe more than you thought, which many people do, don’t let it overwhelm you. The worst thing you can do is to put all of the paperwork back in the drawer and try to forget about it. The sooner you take action, the sooner you will get out of debt.

Start tracking what you spend

One thing you can do immediately to improve things is to track what you spend. Again, don’t be daunted by this task and be sure to start right away. It is a simple matter of downloading a money management app and using it. Try not to spend ages picking one. You can always switch to another one at a later date. Just ask your friends and family what they are using and pick one. The simpler you make things for yourself the more likely it is that you will stick to taking action to work your way out of debt.

You will be surprised by how little time it takes to pause and use the app to make a note of where your money went. Within a week, a month tops, you will be able to see where you are wasting money. Once you do, you can take the necessary action to reduce how much you are spending.

In all likelihood, you will not enjoy going through this process. But, a few months down the line I guarantee that you will be glad that you have started the process of getting your debts under control.

Do you have any tips on how to take some first steps to sort out debt?

You might also be interested to read this feature on saving money for your children’s future, or this one on making your money work harder for you.

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