Being in debt is seen as a normal part of being an adult. You buy, you spend, you save, and you acure some debt. But what if the debt gets out of hand? Here are some options and ideas to help you get back on track with your debt.
What Is Your Debt?
For many people, the debt they have is manageable. If you take away your mortgage, where does your debt come from? If you have a few credit cards or loans, you might need to look at getting rid of some of them. Having a credit card for emergencies is always a good idea if you can resist the temptation to use it.
Check Your Credit Report
Your credit report is one of the most important tools you can utilize when you are checking your finances. Not only can you find accounts that you may have forgotten about, you can also keep an eye on any fraud that might occur. There are plenty of places that allow you to check your score for free.
Can You Budget?
If you carefully looked at your finances and looked at where all of your money is going, would you be surprised to see how much coffee you buy on the way to work? Have a look at what goes in and out of your account. There are priority bills such as your rent and utilities that need to be paid. Once you have these things sorted, you can work from there to curate your own budget plan.
Get Back What You Are Owed
Sometimes we can spiral into debt because we are owed money. Maybe you didn’t get paid for a job you completed, or your business has had problems paying you. Whatever the reason, using a company such as Fleeson Gooing could help you back the money you are owed.
Claim Back Your Bank Charges
In certain circumstances, you may be able to claim back bank charges. This can be a tough one but if you can prove that the bank’s charges are part of your debt problem, you might get those charges refunded. This can apply to bank accounts and credit cards where you have received fees. In this case, you can try your luck. They might say no, or you could receive a small refund cheque.
Debt Before Savings
We all know the benefits of having a safety cushion of savings, but if you are drowning in debt, you might have to use them to clear some of your debt. If you have fallen into arrears with your accounts with your bank, and your savings happen to be there too, it is possible that they will “set off” and use your savings to clear the debt you owe them. This doesn’t happen often but it does happen.
Trim Back the Outgoings
We are sure you have looked at a charge on your bank account and wondered what it was for, only to realise it was for something stupid. A lot of these stupid little outgoings come in the form of direct debits for unused subscriptions. Do you still need that magazine subscription? Or that online access that you pay for and never use? These little bills add and can easily be trimmed away.
Check Your Tax Code
There is a surprising amount you can do if you understand your tax code. By ensuring your finances are properly filled with the Tax Office, you can ensure that you pay the right amount of tax. There are plenty of ways to make deductions to reduce your tax bill. If in doubt, speak to an accountant who can walk you through the process.
Switch to a Lower Interest
Do you know how much interest you are paying on your loans and credit cards? Sometimes switching to a credit account with lower interest can help reduce your monthly outgoings by a significant amount. Plus, this can allow you to pay it all off quicker instead of just the interest.
Find Those Missing Accounts
If you have checked your credit file and discovered there are long forgotten accounts, there may be a chance that there are savings accounts in your name too. There are currently billions of dollars lying in forgotten accounts. After a few years of inactivity, the bank can shut the account down and claim the balance.
Avoid Payday Loans
It might be tough making it to payday sometimes but it is always a good idea to avoid payday loans. On the surface, they might seem like a light at the end of the tunnel, but that light has a hefty interest charge that could leave you worse off than you were before. If possible, avoid them.
Are You Entitled to Any Benefits?
A lot of people have problems making ends meet, however many people are entitled to some form of government help. The amount that you receive depends on your income but you can easily fill in the paperwork to see if you are entitled. You might not be entitled to much, but it is better than nothing.
Talk to Your Bank
If you have been looking at your options and can’t seem to straighten things out, make an appointment with your bank and sit down with an advisor. They can talk through your options and see if they can get you back on track. This might mean shutting down some of your accounts, freezing interest, and consolidating a lot of your debt into a more manageable monthly amount.
The Final Straw, Bankruptcy
Bankruptcy is an extreme option but sometimes that is all we have left. Bankruptcy is one way to clear all of your debt and get a fresh start. But it is not something to consider until you have exhausted all other options because it will have consequences that last for years. There are other, less severe options to bankruptcy which might be a better suit so talk to an independent financial advisor to see what they can do to help you.