The cost of living crisis has hit UK homes, causing many people to fall into debt. Furthermore, it is believed that before inflation reached the heights that it has, many people were spending 40% of their income on debt repayments. It is becoming a big sense of stress for people all over the country, yet it is important that you take control and be honest with yourself about the debt you are in and what you can do about it.
It is a constant worry for many families in the United Kingdom that they will fall into debt due to the rising costs of energy and food bills. Soon, many people, including families will only afford to pay the bills and their weekly food shop. Additionally, there are other bills people have to pay including car insurance, housing insurance, TV licensing, phone contracts and other payments which they have to pay monthly.
Get Your Priorities In Check
First, write down all of your debts which you currently owe, from all of your different bank accounts and loan companies. Then, calculate the other costs they are spending currently. Once you have that list, try and reduce the non-necessities such as music subscriptions and other subscriptions. Your priority should be your debts so ensure you pay this off monthly before you start spending money on unnecessary things.
Get A Spending Calendar Ready
Another thing you can do to help control your day-to-day spending is to print out a blank calendar for the month. Set yourself a daily spending budget, and then at the end of each day, write how much you have spent on the calendar. You can write this in green if you’re 15% under budget, yellow if you’re 10% either way of your budget, and then in red if you’re more than 15% over budget. If you usually spend more at the weekend, then create a weekly budget instead and just make sure that at the end of the week you’re under budget. If you have overspent, look at where you overspent, learn from it and make changes for the next week to take control again. This might sound trivial and it might be unnecessary for some people, but it can really help you to know what you are spending and when, so you can make positive changes and take control.
Move Your Overdraft To a 0% Interest Transfer Credit Card
If you are struggling to get out of your overdraft, we suggest you move into a 0% interest credit card. It can be frustrating trying to get out of your overdraft when you need to pay additional fees for it. Instead, use a specialist money transfer credit card. It allows you to use a card to put money in your bank account.
Transfer Credit Cards to 0% Interest
If you are incapable of paying off the debt with your credit card then we suggest you switch to a balance transfer card. This specific card offers zero interest for a set period, with some of them offering up to 36 months interest-free. However, some cards will charge you to make the switch so find one that doesn’t.
Creditors will often agree to lower interest rates for your monthly payments if they can see you are paying as much as you possibly can. Sometimes, they may offer a payment holiday that allows you to have a bit of time away from paying the interest rates.
Speak to the company you are in debt with and try to arrange a smaller amount per month. Furthermore, sometimes there is a chance they will accept the percentage of what you owe.
If you are ever in doubt about the debts that you owe then you can seek IVA advice as an individual or look at a company voluntary arrangement as a business. They can offer guidance and provide you with information about how you can deal with the debts you currently pay. IVAs are there for those who are unable to afford their current debts that they cannot afford or whose current financial situation has changed dramatically recently.
The cost of living crisis is causing a lot for thousands of homes across the United Kingdom, especially for those who are already in debt and are struggling to pay off debts. If you are spending much more on debt than you possibly cannot afford then you will likely need to seek help, whether it’s from a financial advisor or if you apply for an IVA.