According to a national study, the average amount of debt that most UK families are in is around £7000. That’s a lot of money, isn’t it? The fact is that family life isn’t always easy in terms of finances, as often there’s things to pay for that you just can’t afford, this can cause you to become overdrawn or to stack up a huge bill for not making payments on time, leaving you with debts to pay.
The fact is that a lot of families in the UK are in debt, and it can be a real problem, especially if you’re hoping to someday buy a home of your own. (The more debt you’re in, the less likely that this dream will become a reality.) The problem with being in debt is that it can impact yours’ and your family’s lives in many ways and can lead to all sorts of problems. Having healthy finances is important, not just for yourself but also for your children. The last thing you want is them growing up and developing the same bad financial habits that you have, so making changes sooner rather than later is important.
Of course, when you’ve got a large amount of debt to pay off, it can seem almost impossible that you will ever be able to clear it. However, what it’s important to realise is that it’s not impossible, it might take time, but it is doable, it’s just a case of being willing to make some changes, that’s all. To make the process of becoming debt free a little easier and less daunting, below are some tips and useful pieces of advice to take note of.
Tot up what you owe
The first step that you need to take is to tot up what you owe. Sit down, go through your bank account overdrafts, unpaid bills, and so on, and work out what your overall amount of debt is. It might be scary doing this, but if you are going to get those debts paid off, you need to know how much you owe. Whatever the overall figure is, don’t panic. It might seem like a lot of money, but the fact is that it is possible to clear it, so there’s no need to panic or stress about it. The most important thing is not to bury your head in the sand. Honestly, once you’ve acknowledged the amount that you owe, you will feel better for it. So, take a deep breath, sit down, calculate what you owe, and take the final figure into account. Don’t let it scare you, instead allow it to motivate to do whatever you can to clear your debts.
Tighten your purse strings
A simple way to ensure that you have more money left over each month is to tighten your purse strings a little. Aim to find new ways to cut costs so that you have more money to put into paying off your debts each month. From now on, only buy what you absolutely need and nothing else. You might want a new rug for the living room but ask yourself, do you need it? Tightening the purse strings doesn’t have to mean cutting back on essentials like healthy, wholesome food or dance lessons for the kids, it just means working out what is and isn’t important and finding small ways to cut costs and spend less. Write a list of what you spend each month and use it work out where you could be cutting costs. Perhaps instead of driving the kids to school, you could be walking, for instance. Or, maybe you and your partner could car share to work, instead of taking two cars. The more cost-cutting changes you can make, the better.
Work out a budget
Talking about cutting costs, it’s a good idea to work out a monthly spending budget so that you know what you have each month to spend. Calculate yours’ and your partner’s incomings and then deduct any outgoings from them, so that you know what your monthly budget needs to be. As well as setting money aside for rent or mortgage payments, bills, and gas money for your car, don’t forget to calculate what you need to spend on food and payments for after school clubs, clothes, etc. You will find that once you have a budget in place and know what you can spend on each thing, you will find it easier to save money to clear your debts.
Look into debt management plans
When it comes to clearing your debts, it’s important to consider getting debt advice from money experts, so that you can work out the best way to go about clearing your debts. A lot of people find that having a debt management plan created can help to make the process of clearing their debts that little bit easier. As by having a plan in place of how much to pay each month to each debt can make the process of clearing debts easier to manage and less stressful. These types of plans can be useful as they let you know where you stand financially, ensuring that you always know what you need to pay when this makes keeping track of things easier.
Increase your income
To clear your debts more quickly, perhaps you could consider increasing your income in some way. This could mean seeing about taking on extra hours at work if that’s possible, or it could mean taking on a second job. Or, you could also consider doing some freelance work remotely or starting a small, home-based business. If you want to get those debts gone more quickly, you need to give your income a boost. Starting a small business is a good idea as you can work it around your children, run it online from home, and it shouldn’t cost you much to launch, plus it’s an investment for yours’ and your children’s futures. Running a small, home-based business is much easier and more affordable than you would think, it’s just a case of coming up with an idea for it and getting started.
When it comes to clearing your debts, one of the most important things that you can do is be positive. If you’re going to be successful at getting rid of your debts, you need to have a positive outlook about your finances. If you have a negative attitude and are certain that you will struggle to pay your debts off, you most probably will do. However, if you take a positive approach to things, you are more likely to succeed and successfully clear your debts. It might take time, but with a positive attitude, you’re more likely to get there. Think to yourself ‘I can do this’, ‘I can clear my debts’, and you will clear them – it might take a while, but you will achieve your goal and be debt free, it’s just a case of persevering.
Being in debt is a total nightmare, especially when you’ve got lots of other things to pay for and a family to look after. However, it’s important to stay positive about things and understand that although it will take time to clear your debts, it is doable. If you want to make 2017 the year that you break free from your debts, the tips and pieces of advice above can help. Even if you aren’t able to clear your debts completely this year, you can at least make a start on getting rid of them.