Did you know that March 25 was Debt Freedom Day? Chances are you missed it. This is the day that Unbiased.com figures that the average working person has now paid the interest on their debts for the year.

Statistics of the amount of interest that UK wage earners pay on an annual basis takes up until the end of March before you can say that your earnings are actually going to start paying on your outstanding balances.

The majority of consumers in the UK are struggling to keep their heads above water with the debt load they are carrying. This has been further compounded in the last year with the downturn in the economy resulting in thousands of companies shutting their doors and the employees being laid off.

If you are drowning in debt and are having trouble making ends meet, it is good to know that there are ways you can get out from under this heavy load and the accompanying stress. The first thing you have to do is admit that you are in financial difficulty. The problems won’t solve themselves and they won’t go away simply because you choose to ignore them and not make any changes to your lifestyle. You do need to respond to any requests for payment by at least explaining to the creditor why the payment is late and even offering to make a partial payment. By ignoring the constant requests you are not only deceiving those who extended you credit in good faith, but you are also deceiving yourself.

In order to get a handle on what you actually owe, you need to sit down and make a list of your debts. Include the outstanding balances on each one, the rate of interest charged and the due dates. Include your mortgage or rent payments, and the amount you spend on groceries, clothing and leisure. This will help you plan how you can repay the debts. Start with the ones that are the most urgent, such as accounts that are in arrears or ones that have high rates of interest.

By making a budget for yourself for the month, you will be able to see how much money you do have left over for discretionary use at the end of the month. You can also go over the list to see where you can cut some corners to cut out wasteful spending, which is something that everyone has. Use the extra money to make extra payments on some of your accounts, such as the one with the highest interest or the one with the lowest balance so that you can have it repaid sooner and this will free up more money.

There is always help available from professional counsellors in the field of debt advice that won’t cost you any money. Such services are free and if there is a cost involved, you should avoid using this service. Consumer Credit Counselling Service is one such charity that specializes in helping people with their debt problems and have ways of helping you repay your debts.

Try to pay off any store cards first because these do carry a high rate of interest. You can also shop around for a credit card with a lower rate of interest or possibly one with no interest charges for a specified period of time. This will enable you to pay off more of what you owe instead of paying it away in interest.

Look into switching energy and telephone providers. It is quite possible you can save yourself a lot of money by taking advantage of special offers for new customers with different companies. Switching your mortgage to a different lender is also an option and is not as daunting a task as you may think. With interest rates at an all-time low, there has never been a better time to switch to a fixed rate mortgage and have a lower monthly payment. If it is a possibility in your financial circumstances, you may even be able to switch to an interest-only mortgage giving you the extra money you need to clear away your other debts.

Take a close look at the amount of money that you spend in luxuries. For example, if you usually dine at restaurants several times a week, you can cut this back to once a week. You will be amazed at how much money you can save in this manner. You may have some extra time on your hands and be able to take on a part-time job, which means you can make more money to pay your debts.
You do have to realize that it takes a lot longer to get out of debt than it does to get into debt. It will take time and patience to turn your finances around.

Related posts:

  1. Using the low base rate to clear your debts
  2. Debt Consolidation Or Debt Negotiation – Which One Is Better
  3. Misleading debt advice sites closed by regulator
  4. What are the options for consolidating credit card debt?
  5. What is Debt Consolidation

Tagged with: • • • •

Filed under: Articles

Like this post? Subscribe to my RSS feed and get loads more!