Dealing with debt
Taking control
Most of us have some form of debt - the largest being a mortgage, as few of
us have enough cash sitting around to be able to buy a house outright. The danger
with debt is that it can become a habit. Things like credit cards, store cards
and loans allow us to buy things that we don't have the money for right now. And
while it may be manageable if you pay off your credit cards each month, it can
easily become a problem.
Debt is an expensive way to pay for things, as you're paying the purchase price
plus interest. And the longer you take to pay it off, the more expensive it is.
Breaking the debt habit is the best way to take control of your finances and be
able to start planning for the future.
Understanding when debt is a problem
If you have debts of any kind, it can be hard to plan for the future and achieve
your financial goals. The money you're paying in interest on debts could be going
towards your savings. So the earlier you start to tackle your debts, the easier it
will be.
The most important step you can take towards controlling debt is to budget - this
is the only way you'll have a clear understanding of where your money goes. And only
then can you start to see where you can cut back, prioritise your debts and regain
control.
Create a budget using CCCS Debt Remedy, a free online service from the UK’s leading debt advice
charity. It will identify the extent of your debt problems and provide you with a tailored advice
recommendation to resolve your situation. It's free and you don’t have to give your name.
Recognising when your debt is a problem
There are a number of ways you can start to take control of your debt, the best
one for you will depend on the amount of debt you have and whether you feel it's
manageable. As a guide, if any of these statements apply to you, you should think
about getting help.
- I can only afford to pay the minimum balance on my credit cards each month
- My debts have increased in the last few years but I don't really understand
where the money has gone
- I have more than one card and they are all almost permanently maxed out
- I often don't have enough money in my account to pay for things and cover bills
- I spend more than I earn