Being knowledgeable about debt and how to manage your finances is incredibly powerful. Our hints and tips about budgeting and money management will help you to regain control.
Managing Debt - Tips and Guidance
Being in control of your finances and managing debt can feel like an alien concept to some people. Don’t worry, Debt Movement can provide the debt-management tools to help you need to get back on track.
What Is Debt Management?
Debt management is an umbrella term covering the many different processes that can be used to help manage debt. We can guide you on your personal debt-management journey, from providing support with prioritising debt all the way to budgeting tips and tricks.
How to Manage Debt
Most people struggle with money problems at some point in their lives, and managing debt can be a terrifying prospect — one that often seems impossible. When debt starts mounting, keeping it under control can be difficult, and the only way to do so is to become an excellent money manager.
The first thing to do is to understand the difference between high and low-priority debts. This is because high-priority debts can have major consequences if they are not paid.
What is High-Priority Debt?
- Rent/mortgage payments — you could lose your home if you do not keep up with payments
- Utility bills — your gas/electricity could be switched off if you do not keep up with payments
- TV licence
- Council tax
- Income tax
- Court fines
- Child maintenance — missing these payments could result in a court summons, a visit from a bailiff or even bankruptcy
What is Low-Priority Debt?
- Store cards
- Credit cards
- Borrowed money from family and friends
It is important to understand that low-priority debts still carry a risk if you do not keep up with payments. Your creditors can still use debt collectors and bailiffs, and you could receive a court summons — it just won’t happen as quickly as it will with high-priority debts.
There are also other ways that you can organise your debt. It’s important to prioritise your larger debts or those with the highest interest rates. The higher interest rate makes it harder to pay off with small payments, so you should pay more towards these debts than your smaller/lower-interest creditors. It is important to make sure that you do pay at least the minimum payments towards your debts to avoid further charges being added.
While you are paying a larger amount on those debts, you can set up a minimum-payment arrangement on your smaller/lower-interest debts so that you don’t fall behind on payments.
Budgeting Help and Guidance
Budgeting is an important part of managing your debt. Paying your creditors should take priority over other non-essential spending, and any money you save by spending less should be used to pay those debts.
A great way of managing your finances while paying off your debt is to manage your outgoings month by month. Take a look at our budgeting help and guidance below.
Doing something as simple as writing down your incoming and outgoing expenditure will give you a clear picture of what you need to do to save money and which areas you can budget in to make ends meet.
Another easy way to save money is to ensure that you are not lighting rooms that you aren’t using and that appliances are turned off or in power-saving mode when they aren’t being used. You can also look at using energy-saving bulbs around the house.
Comparison websites can help you check your monthly payments against other suppliers. You’d be surprised by how much you can save on car insurance, mobile-phone contracts, gas and electricity.
As well as checking comparison websites at the end of your contract, ask your supplier how much data you use each month. If you’re using less, they may have a better deal they can put you on. If you’re regularly being charged for going over your data allowance, it may be cheaper to go onto a deal with a larger data allowance.
What Are My Other Options for Managing Debt?
Whether you’re looking for debt-management help or just need some guidance on debt solutions, Debt Movement can provide you with all of the information you need. Request a callback today and chat to one of our friendly and professional team members about how you can start your journey to financial freedom.