Debt is a difficult place in which to find yourself. It is also not an isolated occurrence. As of January 2019, the average UK household is now in £15,400 of debt. No matter what your reason is for finding yourself on the wrong side of your bank balance, the most important thing is find a way in which to put yourself back safely in the black as soon as possible.
1. Collate your Debt
If you have debt spread across different credit cards, store cards, or private loans, then it can be simpler to collate all your debt into one place.
Credit Cards: If you have credit card debt spread across a number of different cards it is worth your while trying to find a card that will allow you to transfer the balance of all your existing cards. This makes it easier to keep a track of your spending and your repayment schedule. Furthermore, depending on your credit history you may be able to find a 0% interest card for a fixed period of time, meaning you can tackle your debt directly without having to pay interest too.
Consolidation Loan: If you have numerous sources of debt, all with differing repayment dates, rates, and amounts, then an unsecured consolidation loan could be another good option for you. It reduces your monthly payments down to one easy to manage amount with one single interest rate.
2. Track your spending
You can do this manually, by making a list of all your outgoings and incomings. However, by using a smart app you take the hard work out of it and you ensure that no transactions fall between the gaps. Oval's statistics section lets you see all your recurring expenses, as well as other information about where your money is going - all in one easy place.
3. Build yourself a budget
Once you understand the way your money comes in and out of your accounts, the better placed you are to build yourself a custom budget. Until your debt is fully paid down, all your savings should go towards chipping away at your debt.
For some help on the best type of budget for you, take a look at the super simple 50/30/20 rule.
4. Set a date to be debt free
Having a target to work towards makes the process of paying off your debt less mentally strenuous. If you know that in 12, 18, or 20 months you will be clear of your debt, it’s much easier to stay on target with your repayments.
By giving yourself an end goal you’re providing yourself a valuable light at the end of the tunnel.
Being in debt is scary, stressful and demotivating. If your debt is affecting your quality of life and endangering your mental health then you need to seek professional advice. There are many well-trained and accredited experts out there who are qualified to help you in just such a situation. You are not alone.