Five debt advice tips

In these difficult times, staying out of debt - or getting out of debt - can be very difficult.

That said, by making a few changes to the way you approach your finances, you could improve your chances of living a life without debt problems. Here`s a few debt advice tips to help you keep your finances in check.

Make a budget

It may sound simple, but making a budget is key to ensuring your finances are in order.

Many people simply spend their money as and when necessary, with little thought about what other costs might be coming up - but if your bills and other commitments are spread out across the month, this can often mean you will run out of money before everything has been covered, and that can lead to debt problems.

So, at the start of each month, note down how much each of your essential commitments costs (this may be more difficult with variable costs such as food, but it`s best to put down a generous estimate, so that you won`t fall short). Subtract the total from your monthly income, and the remaining amount is how much you can afford to spend (or save) as you wish.

Be sure to keep a record of when the money comes out of your account for each commitment, as this will avoid potential confusion later in the month.

Try cutting back

If you`re struggling with your essential costs, consider where you can cut back on your non-essentials to make room.

For example, you might start doing more home cooking instead of eating out or ordering takeaways; you might cancel your satellite TV subscription; you might set less money aside to spend on clothing. Each of these alone might only save you a relatively small amount, but you could be surprised at how much it all adds up.

Don`t spend on credit if you can pay for it now

Credit cards are one of the most popular forms of borrowing in the UK - yet they are also potentially one of the most expensive.

Used carefully, they can be virtually (or entirely) free - as interest is usually charged on the balance at the end of each month - but leave some of that debt to grow, and you could find yourself paying more than 20% interest over the course of a year.

It`s generally much safer to only spend money that you already have - i.e. with cash or a debit card - so you know for certain that you can afford it. Credit cards are generally fine if they`re used sparingly, but it might only take one unexpected cost to stop you making your repayment at the end of the month.

If you`re in debt, speak to your creditors

If you`re struggling to repay your debts, your first move should be to contact your creditors to discuss your options. In some cases, they may agree a repayment plan to help you pay back what you owe over a manageable period of time.

This can be especially helpful for things like bills, in which you might want to continue your monthly payments as normal, and gradually repay your arrears at the same time.

Get professional debt advice

If you`re worried about your debts - whether or not you`ve actually missed any repayments - it`s a good idea to get debt advice from an expert.

A debt adviser can offer guidance on a range of debt solutions, all aimed at helping people in different situations to clear their debts.

To speak to one of our debt advisers today, call 0800 195 2911.

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