If you are struggling with debts, you may feel alienated and alone but for the sake of consolation know that you are certainly not alone!
In fact, lots of people the world over are living with debt, and this could be anything as simple as a student loan right through to a mortgage (home) loan. Acquiring debt is not actually a bad thing – it’s managing that requires the sensible approach.
In this article we are going to look at 5 tips which will help you to manage your debt situation, keeping you free from spiralling debts and helping you to stay in control of your money – and not the other way round!
Keep An Eye On Interest Rates
If you are using a credit card intensely, you may not be aware that interest rates can fluctuate from time to time. To win over new customers, many banks are allowing you to switch your credit card over to them, and in return they offer a cheaper interest rate. Some banks even offer zero fixed interest rate for the first 6 months as a way of welcoming you on board.
Credit cards are a great way to buy large purchases with added security and cover that you won’t find using a debit card; they also help to improve your overall credit rating – only if you manage your credit card payment well though!
Switch Service Providers
As we are still in the midst of a deep recession, banks are not the only companies trying to win new business. Energy providers also want you to switch over to them and to tempt you they promise to undercut your current provider.
This could be a great way of managing your debt situation because it helps to cut down your monthly outgoings. Have a look around to see what gas, electricity and water rates you could be getting. In fact I recently switched to a different natural gas provider and not only did I get a lower rate but I also have a cap on my price.
Set A Weekly Budget
First of all you need to know exactly what you are spending and where the money is going. Look at your bank statements over the last 3 months and work out how much you spend on average. Disregard the more luxurious purchases such as new clothes and meals out, and set a figure for each month that you will not go above.
Work your debt payments into this to ensure that they are paid on time, every month.
Consolidate your debt
This is something you should not go into lightly – consider the consolidation of your existing outgoing debts for easier management. This will involve borrowing a large sum of money from a company which they will use to pay off your debts. So instead of paying back four or five lenders, you pay the company a single monthly standing order.
Obviously these companies are looking to make money so there will be an interest rate or fee to consider but, generally, managing your debts under one roof is a lot simpler than paying multiple lenders at varying times of the month.
Just Spend Less
We touched on this on point #3 and it might seem obvious; but just spend less money. I would wager that if you look at your monthly statements you could easily identify a few frivolous purchases. Next time you are faced with spending money when you don’t need to, consider your current financial situation and make the right choice.
If you find yourself needing to borrow money in the short term, take a look at Logbook Credit – your source for logbook loans.