Sylviawh.co.uk Blog

You are up to your neck in debt and you don’t know which way to turn.  Is this You?

• First of all the DO NOTS. 
• Do not sign up to a debt management team. Yes they will lower your payments and sort them out for you BUT straight away you are adding to your debts.

Management debt counsellors charge a hefty fee for helping you out and you will be looking at paying them for many years to come.

·        Do not sign up for more loans to pay them off, guess what apart from paying off a few debts that are most pressing, you are bound to feel rich for a short while and you could get the spending fever again and you are back where you started. A few debts paid off, but an extra loan to pay off.

  ·        Do not apply for more credit cards in order to pay off another; you are piling debt on to debt.  ·        Do not go on a spending spree to cheer yourself up. And now how can you get yourself out of debt? 

First of all write down every single debt that you owe placing the highest amounts at the top of the list.

Next total the entire debt and see the huge amount of money that you owe, yes it will depress you but this is the start.

If you are honest you will realise that you are spending much more than you earn and eventually you will reach rock bottom.

  Spending is your first priority. What are you spending on to accumulate such a huge amount of debt?

Be honest with yourself and write down every thing you do and what you spend on.  Snacks, luxuries, clothes, leisure, holidays, alcohol etc.

When you get to the end of your huge list you must then decide what you can do without and what you can cut down on to save some extra money to start paying off those bills.

  What have you bought that was just on a whim and you don’t use? Your wardrobe is probably full to over flowing or the gadgets you have bought for your kitchen are lying unused on the shelf. 

Go through everything and if you don’t need it then sell it. Ebay auctions is a good source to sell your goods. 

You are probably already paying minimum payments on you credit cards which mean they will take years to pay as you are only paying off the interest, you will have to stick with this at the moment.

  Don’t bury your head in the sand, if you are getting threatening letters don’t discard them, they will just keep coming. 

If you have cut down on your spending you should have some extra money to pay out, so sit down and write to each of your creditors and explain clearly that you have got yourself in a mess and you can only offer them a small monthly payment at present.

Most of them will agree to this solution rather than receive nothing.

You now have the job of clearing your debts.  Start with the lowest ones first, then as they disappear the extra money should go on to the next lowest.

 It will probably take a long time to clear your debts but in the meantime you will have more peace of mind, and if you practice more economy it will get to be a good habit instead of the bad habits you have at present.