Do you have a pile of unopened bills and statements? Have you deleted your online banking app because you just can’t face it? Do you dread that message from the bank telling you that you are overdrawn yet again? Is it getting you down and affecting your health? Well, you’re not alone. 8 out of 10 of us are struggling with debt.
Facing up to your situation is the first step to making things better. Here are some tips to help you do it.
Clear a Day
If you’ve got unopened bills and accounts that need checking, clear some time to do it. Don’t just open them and then rush out to work. You need to take your time to process your situation. Clear a whole day if possible, but at least an afternoon. Make yourself a cup of coffee, sit with a notepad and pen, all of your bills and a computer or your phone to check your online accounts and start working through.
Make a List
Now you are ready, and your bills are opened, start making a list of everything that you owe. Separate it into things that need paying urgently, such as final demands or outstanding debts and any loans that you’ve used your home as collateral for, and less immediate problems such as store cards, overdrafts and credit cards.
Collect All the Information
Now, look at that list in more detail. Write down everything that you owe, how much you are paying in fees and interest and repayment dates.
Put them in Order
Urgent payments need clearing first, so highlight these and work out how much money you need in the short term. Then, look at your total debts. Put them in order. Those credit cards, loans, and overdrafts that are costing you’re the most in interest and fees should be paid off first. This will free up more money to clear the rest.
Get What You Are Owed
Many of us are terrible at asking for money. We sometimes let things go because we’re afraid to ask. But, if anyone owes you money, this is the time to get it back. Contact a personal injury attorney if you’ve ever had an accident, get in touch with your banks and lenders to see if you’ve ever been sold PPI you didn’t know about, and contact any previous employers that you think could owe you money.
If you don’t already, this is the time to start using a detailed budget. Now you know what you owe, take a look at your cash flow. Set up a basic budget spreadsheet, include everything that goes into and comes out of your bank account every month. Then, you know what you are left with. Try to make cutbacks where you can. Then, start paying more than the minimums on your debts to clear them faster.
Facing up to your debts is hard. That first step can be frightfully overwhelming. But, it needs to be done so that you can move forward. Take your time, take some deep breaths, and get on with it!