Many people are being affected by job loss, repossession/foreclosure, mounting bills and increased outgoings.
Debt has proved to not only be a financial burden but a crisis. It is affecting all aspects of life, from family and relationships to health and well-being. Do not despair there are practical steps that you can take to reduce debt.
You first need to realise that Debt is not the problem but the symptom.
Many people hide their debts from friends and family or sometimes even themselves, by not opening statements or not totalling their liabilities. If that is you, then it is time to do something about it. You can only sort your debts out if you know the scale of them. It may feel better not to know, but in the real world, it makes things worse. You can always seek help!
If Debt is affecting you or your family it is wise to open up about it, bottling up feelings can have harmful repercussions. Sharing your fears and concerns with a neutral party can provide an open platform to alleviate stress.
Top tips to avoid Debt:
1. Learn to budget. One of the best ways to stay solvent is by learning to budget and control your spending. This is not as difficult as it sounds once you get the hang of it. With proper management, cutting back on your spending and focusing on paying off debts, you will be in a much better financial position. Try writing down incoming and outgoings, monitor them.
2. Save by switching. Cut your energy bills by changing your service provider to a cheaper one. Compare car, home and life insurance quotes for the best offer.
3. Set up an emergency fund. An emergency fund could easily mean the difference between losing your home in an economic crisis. Putting money aside regularly will give yourself a cushion should disaster strike. It does not matter how small the amount might be, every little bit counts in an emergency fund.
4. Pay off your debts. Bad debts should be paid off as quickly as possible. If you can’t completely pay them off, at the very least reduce them down to the point where they can easily be managed. As a bonus, you may also be helping your credit score by reducing the amount of debt you have. Seek help from support services that are set up to advise those in a financial crisis.
5. Diversify. One of the best ways to stay economically stable at any time is to diversify. For example, if you are relying on one paycheck for your entire income, it’s time to think about setting up an alternative, legal forms of income.
6. Start downsizing. If you’ve got two cars and don’t need them both, consider selling one and the money made from the sale could be put into an emergency fund. By cutting back strategically, you’ll have more money to keep current on your bills.
7. Get help. Free financial advice is available, ensure that you use a recognised support service. You can start off by contacting your local Citizens Advice Bureau, they can point you in the right direction.