7 Quick Debt Busting Ideas
7 quick tips to help save you a few pennies
If your finding yourself up against a mountain of debt, there are numerous ways in which to change your spending habits and get back on the right path to financial security. Outlined below are 7 quick debt busting ideas that you can implement today to help tackle your debt:
1. Shop around online for good deals on any potential purchases you make - Although excessive spending is not great for reducing for your, there are some situations when large pruchases must be made. An hour or two crawling the net for the cheapest deals can save you tens or even hundreds of pounds. This is especially true for electronical and hardware purchases - so don’t buy in high street stores unless you cannot avoid it.
2. Consider going on a cash only allowance - Allow yourself a set budget of say £35 a week to spend and leave your credit cards at home. This prevents you going for the impulse purchase that you don’t neccesarily need. You will also be taught to think alot more carefully about where you spend your money.
3. Make your own lunches for work - Saving money by making your own lunches can add up to a great deal over the course of a year. If you imagine £3 per day that equates to:
£3 x 5 days = £15 a week
£15 x 52 weeks in a year = £780 a year!
If you make your own lunches, you could save upwards of around £390 a year - nothing to be sniffed at.
4. Ask your boss for more hours at work - If you work in a job that is paid hourly, why not add a few hours to your working week. An added 5 hours a week work could add over £1,000 an year to your income, which could help pay off some of your debt repayments.
5. Rent out a spare room - If you have a spare room or even a loft, which could be converted, you should consider renting it out to earn a little extra money on the side. In the UK, this is easier than ever, with the government’s ‘Rent a Room’ scheme, you can collect up to £4,250 tax free from becoming your own landlord.
6. Ask your credit card companies for a better interest rate - Often credit card companies are so eager to keep your business that, when pushed, will sometimes lower your APR. You can achieve this by ringing and saying that you are considering cancelling your credit card and would stay if you were offered a lesser rate.
7. Start earning cash back on your old items - Think about renting out some of your electrical equipment or machinery on Zilok, the peer to peer sharing site. Alternatively, why not list some of your items on Gumtree or eBay to earn a few extra pounds (Gumtree is still free to use for most categories).
It’s true that every little helps, which is why following a few of these ideas can be used to bust that debt!
Do hobbies increase your debt?
Often when we attempt to consider why we end up with high levels of debt, we look at the common factors such as rent, mortgages and credit card bills to understand our financial situation. Although these areas are key to understand your personal finances, it is also important to consider your hobbies and whether or not they are adding to your financial worries.
If you have expensive hobbies, such attending sports events, music gigs and theatre trips then you may be living too extravagently when instead, you should be considering putting that money to one side to help clear your debt.
Firstly assess how much your hobbies and leisure activities are costing you. Of course, im not saying stay indoors at all times and never enjoy yourself, but you may need to ease back on the spending for a few months while your finances get back on track. The key to debt management is minimise unneccesary spending when you have more urgent outgoings, such as credit card and mortgage payments.
Although you may be a little tighter on the purse strings for a while, there are thousand of free things you can do that wont involve just staying indoors. Check Time Out for some great suggestions. So get to those free museums, gallerys, fetes and shows and save some money in the process. Your bank balance will thank you in the long run.
Succesful Debt Management
Beating debt can be a real task, but you can find success if you know where to look for help. If you find yourself overwhelmed by money troubles, there are a number of debt management resources available for you both online, via phone or in person. Its all about choosing the right option for your own circumstances.
Sometimes it can be easier to look something up online, especially if you are embarrassed about what someone may think of you, but also if you want to remain anonymous about the whole process. However, the qualtiy of advice found online can vary quite dramatically and be wary of some older, more outdated articles which may be misleading. I would also recommend ringing one of the many debt charities, such as the national debtline, that have been established to offer free and confidential money management advice.
A good place to start would be to read all of the debt advice articles on this site - i will be covering a wide range of article topics, ranging from credit card management, budgeting tips and learning how to make your money work harder in savings accounts and bonds. There is also an upcoming site, my debt options, which aims to outline in full, what options are available if you ever find yourself in debt.
Whatever your circumstances there will always be a debt management resource that can be used in a positive way. Sometimes you just have to do a little bit of searching to find the resource that works for you.
Avoid Debt while you can
If just one person who reads this article avoids getting into debt, then i think it has been a success. Sometimes, all some people need is a quick reminder now and again, just to keep you on the track to staying debt free.
Some of these quick tips will help you avoid debt while you have a health bank balance. For the spendaholics amongst us, there are still some lessons to be learnt from these 5 quick tips to keep you out of debt:
1. Create a weekly or monthly budget and try not to overspend.
- Base this budget around your monthly income and deduct your outgoings.
- Divide the remaining money into essentials, such as food and bills.
- Try to put some money aside, if there is left over money at the end of the week.
2. Avoid using credit whenever possible - It is probably out of your budget if you are thinking about using credit cards to make the purchase. Cut up that plastic and get saving if you really want the item that bad!
3. Bin all those loan and credit card forms you receive through the mail - Avoid temptations by ditching those shiny leaflets when you want to go on a spending spree. Often lenders will sell personal data to other financial companies, when they are aware you are looking for credit.
4. Think about your savings - Learning about how to save money from an early age is a must. Even £5, £10 or £20 a month into a savings account can really add up over the years, if you have some money spare, tuck it away into a high interest account for a rainy day. This nest egg can help you if you run into financial difficulty.
5. Do some work on the side - Check your local paper and see if there are any part time jobs you could do while you have a few spare hours. The extra cash can help keep you above board, whilst your financial situation improves.
Student Bank Accounts
If you have ever been a student, then you are probably used to being short on money. Student debt is becoming a major strain on young individuals within education, and it is extremely important to learn how to control your finances while in further education. Otherwise, you may find yourself coming out of university with more debt than you can afford to repay.
Luckily, in most circumstances, student loans are only payable back to the Student Loans Company when a postgraduates salary reaches around £19,000 per year (or £1,250 per month takehome, after tax and National Insurance has been deducted.)
Banks within the UK are extremely keen to attract student accounts, this is because although they make very little on the accounts by offering interest free overdrafts, they can often secure long term customers once the students graduate. They are also willing to offer student credit at attractive rates to encourage reckless spending. Be wary of your bank offering you attract, low limit credit cards, instead focus on managing what money you do have correctly rather than amassing a large credit card bill.
As consumers rarely change their banking providers in later years, getting students to sign up for a current account before they start earning big salaries is a no brainer. With that in mind, be sensible and don’t be drawn to a student account which offers cheap perks. Carefully study their interest rates, overdraft charges and any other additional fees which may affect you after you graduate.
As long as you don’t blow your student loan in freshers week, student loans and student bank accounts can be a fantastic way to get you through university without ammasing a large level of debt.
How to avoid Debt
We talk alot on this blog about how to get yourself out of debt, but we should also consider how to avoid debt in the first instance. With so many financial pressures in todays society, we should always be aware of the well known idiom:
“Prevention is better than cure”
With that in mind, it is always advisable to think before you act, because once you are in debt, it can be a vicious spiral of more and more borrowing.
If you are close to the being in the red, consider a few of these simple steps:
Spend within your means - Never intentionally spend outside your budget. The ‘buy now and think later’ attitude is a surefire way to get yourself into debt. Understand your earnings, take away your monthly expenditure and that is your expendable income.
Keep detailed financial records - Set up a simple excel spreadsheet to calculate your spending. Every time you make a purchase, add this to your spreadsheet and this will allow you to understand where your money is going. Don’t miss anything out, even small purchases add up to a considerable amount over a month.
Avoid using credit cards at every opportunity - By adding to your credit card budget when you can spend via other means, you are increasing the likelihood of overspending or forgetting about this outstanding balance. Relying on varying forms of credit for purchases can lead to a dependency on credit cards for purchases, when in reality, you can’t afford the item in the first place.
Think about your savings - There are various ways to increase your assets, through popular saving methods such as ISA’s, savings accounts, bonds and stocks. If you are able to set money aside on a monthly basis, no matter how small, this can create a ‘nest egg’ for any tough financial spells later in your life.
If you are in debt already, you can take something from these tips. Being able to budget effectively is one of the most important aspects of keeping a healthy bank balance.
Debt Management Tips
Being in debt can put a strain on not just your financial stability, but also your emotional stability, which is why becoming debt free is a process which requires determinationation and persistence! Families, relationships and bad credit ratings can all be rescued if you stay focused, and look for a sensible way out of the red.
Some pointers to help with managing your debt:
- Stay on track - You need to stay focused, and plan out your budgeting strategies carefully. That way, you will regain your self belief and that all important self control, which will enable you to becoming debt free once again.
- Avoid temptations - Unreputable lenders, like loan sharks or pay day loans can get you into worse financial shape than before - These ‘quick fix’ ways of getting money can cost you heavily in the long run. Instead, considering speaking to a debt management consultant or advisor, or ring the national debtline, a registered charity who have knowledgable staff, ready to give you advice on all types of debt related questions. For those who didnt know, their number is 0808 808 4000.
- Seek emotional support from loved ones and friends - Dealing with the stresses of being in debt can be made easier if you share this burden. Tell those you trust about your situation - It can be a great way to relieve your worries, by talking over your situation with others.
- Don’t loose hope - Millinos of people in the past, and in years to come, HAVE and WILL overcome debt, so that means you can too! All you need to do is follow the advice of this site, and apply a clear and focused approach to managing your debt, and things will work out!
Speaking to your Lenders
Speaking to your lender may save you from financial collapse - Sometimes, all you need in times of hardship are some tips on how to overcome the problem. We can often become so overwhelmed by the problem of debt, overdrafts, credit cards that we don’t consider speaking to the people who we actually have credit agreements with. On top of learning how to manage your debt correctly, you should also consider how to properly deal with lenders, as you can help things with a few simple phone calls .
When you notice the first signs of being likely to struggle with repayments, be sure to contact your lenders and explain the situation that you are in. Most lenders will appreciate the fact that you have shown dedication to getting your balance paid, and it may be possible, in some cuircumstances to renogiate your payments to something more suitable. Just think about it this way; your lenders want and need you to pay back every last penny that is owed to them, so they would prefer you to pay the balance back over a long time rather than not at all.
You may be entitled to a ‘payment holiday’ or extended period where you are not required to make a loan / credit card / mortgage payment. This can be a fantastic opportunity to get your finances back on track, and ensure your next payment is in full and on time. If you are offered a payment holiday, do everything you can in the period (say a month) to save money, possibly find additional work hours and get prepared for your next payment. Just because you don’t have a mortgage payment in one month, shouldn’t mean you spend that extra money frivolously.
Although not all lenders will offer such services to their customers, it is always worth a try, a simple phonecall could help you to keep your head above the water.
Stricken with Debt - Where can you turn?
Debt can be accumulated by anyone, the well paid, the famous and even the thrifty. It is extremely difficult to predict how your fortunes will pan out, with redundancy, illness and family all creating potential financial difficulties. Do not panic if you feel you budget becoming tighter, and your bank balances shrinking, the helpful guides outlined in this site will help to ease your situation. Debt can strike when you are least expecting it, when you feel secure, so it can be reassuring to know that there is light at the end of the tunnel.
This is not to say you should seek help and then forget about it, without proper debt management, your finances can spiral out of control and result in an endless cycle of more and more borrowing. If you are feeling anxious or worried about debt, you should consider seeking professional debt advice, or try speaking to one of the many debt councilling / debt advice charities available. They are specifically there to help talk through your finances and help you find a way out, without increasing your debt any further.
If you find yourself in financial trouble, please email debtmanagementtips [at] gmail.com, and i will try and post your question to other readers of this blog, in the hope of offering some confidential advice, from people in similar situations to your own. Your confidentiality is my highest priority, so don’t worry, we wont post your name or details.
Basic bill management - Beat that debt
Good organisation can really help with prioritising your debts
One quick tip for helping you manage your debt is…. management. Sounds obvious right? Well, one of the most important processes i teach people is how to take control of your life again and start accepting responsibility for your financial situation and managing your money more effectively is a great start. Follow these 3 simple steps to help with managing your finances.
If you organise your debt - it is easier to prioritise
A lot of people will throw all of their bills, receipts and statements into either a pile, or the bin. No wonder alot of the time you don’t know where your money needs to go or who you owe.
- Organise your bills into simple groups - By filing your documents into utilities, credit cards, bank fees, mortgage payments, urgent etc you can know exactly which companies you are dealing with, and which needs paying first. A simple folder and a few plastic sleeves are great for this.
- Create a spreadsheet with your outstanding debt on it - That way you can size up your situation, and hopefully see it gradually decrease over time.It also gives you a reality check - a pile of bills may not give you the full picture.
- Organise a priority to your bills - Label each bill with a priority from 1-10, a 0% interest credit card (3) can take a backseat while you pay off you 12.9% APR loan (9). Think about your current situation and assign a priority to each bill.
By simply changing the way you deal with your debt, you can help yourself to fully understand your situation. It may be difficult at first, but honesty and basic bill management is key to getting back on track, and into the black.
