| Product: |
Debt Help in General |
| Date: |
24.03.08 (139 review reads) |
| Rating: |
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Advantages: Being debt free feels good
Disadvantages: Being in debt is stressful
The first piece of advice I would give to anyone finding themselves in debt is don't ignore it. It will only get worse. It may be difficult or embarrassing to deal with, but the sooner you start the better.
First things first - get some advice. Your local Citizens Advice Bureau can put you in touch with someone qualified to help. Don't be afraid of talking to a professional about your problem, credit is far too easily available these days and many people get themselves in too deep, so you're not alone.
Get in touch with your creditors and explain that you are unable to pay in full at the moment but offer to pay an amount monthly, however small. Most firms would find this acceptable and are more likely to be accommodating than if you were to let the debt build up out of control. Write to your credit card company and ask them if they would freeze the interest while you get the debt under control. If you don't ask you don't get - the worst they can do is to say no.
One idea is to take out a single loan to pay off all your debts. This would mean a lower amount to pay back each month but over a longer period of time and, of course, you will have to pay interest on the loan. Before doing this shop around for the best interest rates and take advice if you need to. Do not under any circumstances take out a loan with a company you know nothing about. You may end up in even more debt. The thing to remember is, once you have taken out the loan, don't start spending and allow the debts to build up again or you'll be worse off.
My main reason for writing this opinion is the prevention of unmanageable debt. I would like to share some ideas with you that work for me and may be of some help to others.
I have a separate savings account purely for the payment of my bills. I began by calculating the cost of a full year for electricity, gas, water rates, television licence, car tax, car insurance, AA fee and telephone. I then added them together and divided the grand total by twelve and I pay that amount into the account each month. That way, even if all the bills came at the same time, I would still be in a position to pay them all. I also get about £25 a year interest on the balance too.
You may also be able to save on some of your bills by paying by direct debit. I do this for a few of my quarterly bills and I have just set up the direct debit to come out of my current account and deduct that amount from the amount that I transfer to the 'bills account' each month.
If you have a credit card balance which you are trying to pay off it is always worth keeping an eye open for special offers on interest rates. Many companies offer low rates or 0% on transferred balances usually for a period of six months. If you have a large amount outstanding on your card it may make sense to transfer your debt from one company to another so that you are always taking advantage of low interest rates.
It is also advisable to pay off more than the minimum amount required - however small - as this helps to reduce the debt more quickly.
I know that it isn't really advisable to think of your mortgage as a debt as such or most of us wouldn't sleep at night, but, if you do have some spare cash, it is worth paying off a bit extra each month. You need to check with your mortgage company that you are allowed to do this. We have a flexible mortgage and by paying of a bit extra we are both shortening the life of the mortgage and saving a lot of interest in the long term.
The last point to make in the fight against rising debt is to think of ways to economise. By this I don't mean sitting freezing because you don't want to put the heating on! It is worth thinking about what energy you use and if you can do things more efficiently. Only use the washing machine when you have a full load for example, or use the half-wash programme if you have one.
Look at your shopping habits; is there room for savings there? Remember to use any vouchers you find in magazines. You can use these at Tesco or Asda even if you don't buy the product providing they stock the product. If something is wrong complain and get your money back, don't just throw it away. Remember to use your store loyalty cards too, I know it's not a fortune but every little helps.
If you see a special offer on something that would make a good birthday or Christmas present, get in while the offer is on and keep it safe until you need it. If you start getting your presents and non-perishable items early, Christmas needn't be a time when debt gets out of control.
In conclusion I would say the following:
Think of ways to economise to reduce the risk of debt.
Plan ahead for the payment of bills.
If you do get into debt act quickly, don't let it get out of hand.
Seek advice before taking out any loans.
Think before you buy something - do you need it?
I hope that some of these ideas help.
This review is updated from one published on Ciao by me in 2001.
Incidentally I give the debt control ideas five stars not the debt! LOL!
Summary: Think about your debt and sort it out before it gets out of control
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