Debt Consolidation Soars In The UK
If you’ve been feeling concerned about how to manage your debt recently, then it will probably come as no surprise to you that you’re not on your own.
According to Financial Reporter, a record number of people across the UK have been searching the term ‘debt consolidation’, hitting highs not seen since September 2012.
The Bank of England has also revealed statistics pertaining to the end of 2016 that prove lending to individuals has increased by £5.1 billion.
One way of dealing with debt and getting back on track is to seek the advice of a financial expert, particularly those who specialise in credit repair.
Time spent looking at the reviews from CreditRepairCompanies.com can open the doors to a few leads. A second approach could be to tackle the issue in-house and create a financial plan that will hopefully help you get back on track.
Most financial difficulties can be overcome with a solid strategy and the right amount of discipline.
Consolidate your loans
There’s a reason why debt consolidation trends are soaring in Britain: consolidation loans are a good place to begin when your credit levels and debt are getting out of control, because they offer a number of benefits.
The most common is the lower monthly payment; a natural consequence of paying back what you owe over a longer period of time.
Consolidating can also help to make you feel less overwhelmed and a lot more organised, as your debt is combined into a single monthly payment.
In some cases, there are also opportunities to benefit from a reduced interest rate.
Reduce your outgoings and create a new monthly budget
Once you’ve managed to merge all your debts into one monthly payment, it’s time to make some serious changes to your lifestyle.
No matter how much you want to fight against the idea, if you’re in debt it’s because you don’t earn enough money to cover your expenses, plain and simple.
To get out of debt, you must spend less than you earn and be ready to give up on certain luxuries.
Take a look at your shopping list. Remove the crisps, biscuits, alcohol and readymade meals and start preparing lunches and dinners that require cheaper ingredients.
Set yourself a weekly limit for your shopping bill and stick to it. According to Money Advice Service, the average UK family spends £53.20 a week at the supermarket. How does your shop compare to that?
You can also revise your monthly bills. Maybe it’s time to reduce your mobile phone plan, cancel your cable TV package, or maybe even make the decision to sell the car.
Remember, car insurance, petrol, repairs, MOT and parking fees must all be included when calculating how much your car really costs.
You might have to walk more and use public transport to take the children to school, but if it means you keep outgoings below income then it’ll be worth it.
When creating a reduced monthly budget, it’s not about being miserly and having no fun at all. It’s simply about being realistic. You can’t continue to live an expensive lifestyle if you don’t have the money to pay for it.
It’s about being honest with yourself and finding cheaper ways of enjoying life until you get yourself back on track.
Keep a detailed check on everything you spend
Once you’ve outlined your new budget, you need to monitor it to make sure you’re actually sticking to it. Indulging in those little treats, which seem cheap and innocent, can actually add up and throw you off budget.
For instance, buying a coffee from a chain store on the way to work costs on average £2.50 in the UK. If you buy a coffee before work every day and you work just 20 days a month, you’re already looking at £50 a month and an incredible £600 a year. And that’s just for a daily cup of coffee.
There’s nothing to stop you from enjoying your morning caffeine kick, but maybe it’s time to use that £600 to pay off some debt and take a home-brewed coffee with you to work in a flask.
No more loans and no credit cards
You’ve consolidated your loans and you’ve established a new budget that’s within your means, so don’t complicate things by taking out another loan or using your credit card to cover Christmas gifts, for example.
The money you have for Christmas should also come out of your new budget and so if Christmas needs to be a little less extravagant this year, then so be it.
Get into the habit of only spending money that you know you actually have to spend. Make yours a debit card lifestyle for a while.
Aim to have all debt paid off within a year
On a final note, be ambitious and aim to get everything sorted within a year. The quicker you can pay off your debts, the less interest you’ll be handing over and the quicker you can get back to enjoying that feeling of financial freedom.
Opting for the minimum monthly payment might seem more attractive, but the more you pay every month the quicker your debt will go away.
Debt is a rising issue for many of us in the UK and so it’s time to take better hold of the reigns before our financial situation spirals out of control.
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