Your Ultimate Guide to Beating Debt in 5 Easy Steps

| December 18, 2014 | 0 Comments

Beating debt is vital. If you want to live a prosperous and happy life, you need to ensure that you are taking stock of your financial affairs. While debt can seem all consuming, it doesn’t have to be on. On the contrary, there are some practical ways that you can beat debt and live a financially secure life.

Here are five easy steps to beating debt:

Step 1: Review Your Financial Situation

Many people feel more comfortable with their debts when they actively know how much they owe. Now is the time to assess your financial situation. Draw up an income and expenditure. Download a budgeting app. These are great ways of making sure that you have enough cash at the end of the month. Look at your credit agreements and see if you can afford to pay more. The key to getting out of debt is to pay it off quicker. Sorry, there is no quick fix.

Step 2: Pay Debts Little and Often

If you have more disposable cash, now is the time to start paying off more on your debts. Assess which ones have the highest interest and pay those off first. Even an additional £20 per month can make a big difference. So, pay more when you can and ensure that you are beating debt.

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Image source: Simon Cunningham

 

Step 3: Speak to Your Creditors

Should your financial situation not be ideal, talk to your creditors. They may be able to reduce the overall cost of your interest payments. They may allow you to take a small, temporary break while you get back on your feet. Not all creditors will be forthcoming and helpful. But, speaking to them directly can ensure that do not have debt collectors knocking at your door.

Step 4: Consolidate Your Loans

Consolidating your loans may be a helpful way of managing your debt. But do check out the terms and conditions of your loans first. Consolidation can be useful if you want to make only one repayment.  You may have taken out a PPI policy too. So, if you are struggling to make repayments, ensure that this policy is effective. In some cases, Barclays PPI, among other banks and policies, are not suitable for the type of loans that have been taken out. If you have found that your PPI policy has been mis-sold, you can claim this money back. Use the money to pay off your existing debts. The key to getting out of debt is to ensure that you are proactive with any extra cash that comes your way.

Step 5: Avoid Debt in the Future

Now that you have taken the positive step of managing your debt, you need to avoid it actively in the future. This is the best way of making sure that you get back on track. While you are in the process of beating debt, avoid taking out other credit agreements. So, cut up your credit cards and make sure that you are taking stock of your finances.

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Category: Debt

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