Getting into debt is actually too easy, but getting out of it can be a bit of a nightmare. Here are some quick tips to help you manage your debts a little better and how to avoid them altogether.
If you’re struggling to make ends meet and worry at the same time about getting threatening letters through the post or worse still, the bailiffs coming round, there is a simple solution. To cut debt most collection agencies are happy to take monthly payments, some as low as $10, and they can take payment straight out of your bank account.
If this makes you nervous, know that collection agencies are bound by law not to take out of your account more than you give them entitlement to.
If you really want to cut debt it is a good idea to have an emergency fund. If you chip a small amount away each month into an ISA or savings account, that small amount soon grows, thus protecting yourself when something unexpected occurs – in this case, an unusually large bill or unemployment.
If you don’t trust yourself to not dip into the account, give the card or bank access details to someone you trust. That way you can only access it when you really need it and that’s exactly what an emergency fund is for.
If you find yourself struggling to make ends meet each month and struggling to pay rent or bills, start cutting back on the pleasant luxuries. Everyone loves going for takeouts or retail therapy, but if it starts cutting into your daily living expenses then you’re going to end up in debt sooner rather than later.
Cut debt by cancelling that gym membership you rarely use (you can workout at home) or that Netflix subscription that isn’t really meeting your entertainment needs (there are free TV apps out there). These little luxuries do stack up over time and the total cost can be significant.
If you’re finding yourself paying out more than what you bring in it’s time to downgrade. Move to a place where the rent is cheaper, switch to a more efficient energy supplier, etc…
Sometimes we live a life of luxury without taking into consideration how quickly those costs can creep up on us and it can happen out of the blue, too. Be sure to keep an eye on who you rent from and who supplies your energy.
Minimizing the overall costs of living can help cut debt quite a bit or even the chance of getting into it in the first place.