The last few years have been tough on many people's finances and money worries can take a serious toll on relationships, stress levels and your health - especially with the extra stress of Christmas expenditure. If you're already worried about getting into debt, here are some tips to sort out your finances.
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Get your finances in order
The first step to getting back on a financial even keel is to take a long, hard look at your current situation. Make a list of everything you owe, including regular payments, monthly direct debits and arrears. Until you know exactly how much you owe and to whom, it will be impossible to make a feasible plan for getting out of debt.
Now that you are fully aware of how much you owe, take another look at your bank statement and work out what your monthly or weekly expenses are. Not only will this enable you to call your creditors with a reasonable repayment plan but you may well spot areas in which you can slash your day-to-day spending.
And when you've worked out your budget stick to it - if needs be, take your weekly allowance out in cash so that you can be sure you're not overspending.
Give what you can afford
Christmas comes but once a year - but the debts can last for a very long time. If you can't afford to splash out this Christmas, warn friends and family that you'll only be giving small gifts this year (ie £5 a head) or you'll be making home made presents.
You may find that people are surprisingly understanding - even the kids. Remember, there are ways to make it special without forking out on expensive gifts.
Prioritise your debts
No debt can be ignored but some must take precedence, particularly if you are unable to fulfil all your financial commitments each month. Mortgage payments, secured loans, taxes (including council tax) and utility bills should be top of your list as the consequences of missing payments can be so severe.
Once the essentials have been dealt with, you can move on to credit cards, loans, overdrafts and other debts such as store cards.
Being heavily in debt can be an overwhelming feeling and all too many bury their head in the sand, ignoring demands and phone calls from their creditors. Don't. The majority of lenders are more understanding than you may think and, since they are keen to get their money back, will help you come up with a plan to pay off what you owe based on what you can realistically afford. Make the call, stop the threatening letters and give yourself a little peace of mind.
There comes a point where debt becomes a deep, dark hole with not even a chink of light at the end. But you don't have to deal with it alone. Come clean to family and loved ones and you will receive some much-needed support.
As well as being able to talk to those close to you about your money worries, call a debt advice line, such as the National Debtline or PayPlan, both of which offer impartial, free and confidential advice. Such services are there to advise you on the possible options, including debt consolidation, Individual Voluntary Agreements (IVAs) and, in the worst cases, bankruptcy.
For more advice on tackling debt, visit Moneysavingexpert.com