Is money too tight to mention? You are probably not alone there. The price of living does not go down, only up. And money can often seem as though it is a friend to nobody. Managing your finances can be an uphill struggle at times, and it can sometimes seem difficult to achieve a debt-free life.
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If you are someone who dreads the sight of a letter coming through the door, then debts are a real problem, and you need to face up to them. It can be very difficult to do this, as when we’re really struggling with money we don’t like to admit that there is a problem there.
Often, the solution to money problems is to take out more debt. Eventually, you end up with a pile of different loans and credit cards and a financial headache that you just cannot seem to get over.
Don’t Bury Your Head In The Sand
If you want to get on top of your money problems, you need to take ownership of them. This means not hiding bills from yourself or your partner. This means opening your mail and checking your online banking. You may have money problems, but it is entirely possible to overcome these problems if you are able to face up to them.
Work Out Your Debt
Once you have taken a deep breath, you are ready to take the plunge. The first step is to examine the scale of the situation. Work out how much money you actually owe. Sorting this out by the interest rate is the best option, as the higher the rate, the more the debt will cost you in the long run.
Consolidate Your Debt
If at all possible, you should look at consolidating your debt. If you have a poor credit score, you may need to look at taking out a secured loan against your home, if you own one. You may also want to look at other ways of borrowing. Buddy loans are a direct guarantor loan lender and can lend to people with a poor credit score.
If you do take out a loan, you should always check to ensure you can meet the monthly payments, and that you understand the interest rates.
Go Through Your Income And Expenditure
Getting on top of your money problems means giving your finances a full health check. To do this, you will need to go through your online banking and create a spreadsheet listing all of the money that you have going out each month. Start with the biggest items such as mortgage or rent payments, and then include money that goes towards loans, and then all of your other outgoings such utility and phone bills.
Work out how much you spend on food and transport each month. This is probably going to differ from month to month, so you may need to estimate, or take an average.
Then, compare your outgoings against your income. If you don’t have much money spare, you should go through your finances and see where you can make savings.
Look For Cost Savings
There will be opportunities to reduce your monthly outgoings. Look at items that you are paying out that are not essential. If you have any subscriptions or memberships, you may want to cancel these, especially if you do not get the full use out of them.
When it comes to phone, utility or insurance payments, shop around and see if you are able to get these cheaper elsewhere. Often, the great offers that we get when we sign up for a service disappear after we have been with them for a while. When the prices go up, you should look to switch to a cheaper supplier.
There are debt charities and organizations that have in place to help people who are struggling financially. You may be able to get help from someone who can go through your finances and help you find real ways to make a difference in your budgeting. They may be able to offer practical solutions to help you to get out of your situation.
In some cases, where debt has become totally unmanageable, an organization may be able to speak with the loan provider on your behalf and come to an arrangement over your repayments. Sometimes it is possible to reduce the payments each month so that you can afford to make them. This may affect your credit score and should be only be considered if nothing else can help.