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How to Avoid Debt - Tips and Guidance

We’ve put together our top tips for those who want help avoiding debt before it becomes a problem. The biggest step you can take toward becoming a great money manager is to get the debt guidance you need to be able to avoid getting into trouble with your financial situation. If you’re worried about problem debt, don’t forget, debt guidance from Debt Movement is free and easy. Just request a free callback today to chat with one of our friendly team members.

Help Avoiding Debt — Our Top Tips

Make a list of all of your bills and outgoings, and prioritise the most important ones, such as your mortgage/rent and your utility bills. Knowing what you owe and when it leaves your bank account can help you to get a better understanding of what you can and can’t afford to spend.

Top tip: If your payment dates are spread across the month, put them in your calendar with the payment amount and what they are. This is a great way of checking what is leaving your account and when at a glance. You can then refer to it before spending.

Making unnecessary purchases is one of the easiest ways to get into debt. Whether it’s a large purchase like the lure of a new car or just regular takeaways and online shopping.

Top tip: Each payday, work out what you can afford to spend on non-essential purchases and stick to it. If you can’t pay for it after all of your bills have been paid without using credit cards and finance options, then you can’t afford it!

If you do have credit cards or items bought on credit or hire purchase, make your payments on time every month. Your credit score can be severely affected by late payments.

Top tip: If you can, pay your credit card off in full at the end of each month. Doing this can have a positive impact on your credit score and reduce the amount of interest you will pay.

Budgeting can be one of the best ways to ensure that you don’t miss payments or get into debt with your creditors.

Top tip: Have a bank account just for spending money. Each month, work out your exact outgoings (always leaving a buffer, of course) and transfer the amount you feel you can comfortably spend without putting yourself at risk. That way, you significantly reduce the risk of dipping into money that you can’t afford to spend.

We’ve all been there, you wander around a shop picking up things along the way, and when you get to the till, you’re shocked by how much you’ve spent. Online shopping means that you can see your total cost building in your basket.

Top tip: Decide how much you want to spend before you start. Then, when you think you’re ready to checkout, open your basket and go through your items, removing the “non-essentials”. You may even surprise yourself and spend less than you expected!

Magazine and TV subscriptions, unused gym memberships and other monthly outgoings can soon mount up! Take a look at your bank statements, and check for small subscriptions you may have forgotten about.

Top tip: If you haven’t used something for over a month, think about whether you need it, and consider cancelling it. You’ll be amazed at what you can live without and how much you could save from cancelling these smaller monthly amounts.

From utility bills and mortgages to mobile-phone contracts and insurances, there are comparison websites out there to help you save money on your monthly outgoings. When you’re coming to the end of a contracted period with one of your suppliers, don’t just let it roll over. You could save hundreds of pounds a year across your bills if you switch.

Top tip: Read the small print. Some providers may seem cheaper than others because their “package” contains less. For example, the cheapest car insurance cover may seem like a bargain, but check whether it covers you for all the necessities you need, such as windscreen or breakdown cover.

When you’re struggling with a tight budget, creating a savings account can seem like a far stretch. But every little counts, and whatever you don’t spend from your budget each month can go over to your savings, whether it’s £1 or £100.

Top tip: A lot of bank accounts are currently running a “round up to the nearest pound” or “save the change” scheme. Whenever you spend on your debit card, your bank will round it to the nearest pound (or £10 if you choose) and pop the change in a savings account. It’s incredible how much money you could save across a month this way. Check with your bank to see if they do this.

Make money a topic of conversation in your household. Many people find that money can be a taboo subject, but if you’re all working toward the same goal then saving money and being on top of your finances will become far more achievable.

Top tip: If you’re worried about problem debt, talk to Debt Movement about your financial issues, and one of our friendly, caring team members will help you to choose the debt solution that’s right for your circumstances. Request a free call-back today!