Debt is a problem in the UK at both a governmental level and a personal one. From credit cards alone, the UK had racked up £66.4 billion in June 2023. This was an increase of around 8% from the previous year.
Money worries can have a significant impact on your mental health as well. People can be left feeling anxious and worried as well as struggling to sleep over their financial woes. You may also find yourself feeling guilty when you do spend money, as you may feel it is a waste.
Clearing your debts can go a long way towards easing the stress. Here are some tips to help you do that.
Priority debts
Before you can think about payments, you will need to make a list of exactly what you owe and to whom. It is also worth making a note of the interest rates for each, as this will help to determine which you should prioritise.
Unless you have come into some money, you may find juggling all the different payments challenging. You should prioritise paying off those debts with the highest interest rates first as this will cost you more money in the long run.
Meeting payments
Meeting a payment schedule is incredibly important as it can affect both the immediate debt and your credit score. This then makes it harder to acquire credit in the future should you need it.
If you have multiple debts, you can simplify the repayment procedure by using a debt consolidation loan to combine them all together, leaving you with one manageable monthly payment. This will help you to organise your finances and ensure you pay everything off accordingly.
Budgeting
Budgeting is something that everyone should do, regardless of whether they are in a bad financial position or not. By comparing your outgoings to your income, you are able to identify any areas where you could cut back and save a bit of money.
You may be able to cut some subscriptions such as streaming services or an unused gym membership. If you use these things, however, you may want to keep them. Depriving yourself of everything you enjoy can make your mental health worse, leading you to find it harder to sort everything out.
Financial expert support
Debt can be an overwhelming topic and you may not feel comfortable talking to friends and family about your personal situation.
There are some amazing charities in the UK with experts who can give you free and impartial advice. You can contact them by phone and they will be able to either help you form a plan or put you in touch with someone who can sit down with you and go through everything.
National Debtline works by offering you advice on how to make a budget as well as looking at ways to improve your immediate financial situation.
