Being in debt can feel crushing and soul-destroying. You’re sitting there, staring at the budget you’ve created, wondering how you can possibly accommodate repayment fees on top of all your other expenses. Quickly, things can start to pile up, and your situation can feel hopeless. In truth, this is rarely the case, however. Very often, we dramatise and exaggerate our situations, making them feel and seem worse than they really are. With proper financial management and a little hard work, even the most pressing debt can be reduced and eventually paid off. Here are 9 tips to help get you out of debt.
1. Try taking out a loan
We know it sounds absurd, but taking out a loan can actually be seriously beneficial to your debt situation. There are, for example, consolidation loans that can help you to bring all of your debt together under one roof, so to speak, improving your rates and making them all easier to pay. If your debt is relatively small, then taking out £1000 loans and then paying them back as quickly as you can could not only clear your debt, but also improve your credit rating into the bargain. If your trouble is serious, then don’t take out a loan, but if it’s relatively low-stakes debt, a loan could really help.
2. Create a detailed budget
If you haven’t already created a budget for yourself, then this should be your first course of action if you’re struggling with debt. After all, you can’t get a handle on your finances if you don’t have a clear and detailed picture of what they look like. This involves combing your bank statements, checking for all of your incoming and outgoing finances and seeing how they stack up against one another. Once you’ve done this, you can move on to examining your spending and seeing if there are any places in which you can make some cuts.
3. Cut back on spending
Sometimes, it’s impossible to cut back on spending. If this is the case, you should seek a financial advisor’s help as soon as possible. However, if you’re still keeping your head above water, there are almost certainly places in which you could strip back your spending a little without sacrificing your lifestyle. Why not start buying supermarket own-brand goods instead of branded versions, for example? This can save a surprising amount of money, and you’d be amazed at how quickly you’ll adapt to the new flavours of what you’re eating.
4. Examine subscriptions
A staggering £25 billion a year is wasted on subscriptions that British people don’t even use. Don’t be part of that statistic. When you’re creating your budget – and, ideally, at regular intervals thereafter – examine your bank statements closely for subscriptions that you’re no longer using. Many companies won’t send you reminders that your monthly subscription date is coming up, so you’ll often pay without even realising the money has left your account. This can be a surprising drain on your finances, so be sure to be vigilant.
5. Go out less
Heartbreaking as it may feel, going out less for your entertainment can be a good way to cut back on money. For example, let’s say you take a weekly cinema trip with your friends or your partner. This could be switched to a Netflix or Amazon Prime membership, which is much cheaper and will still allow you to watch a new movie each and every week (if you ration out the content, of course). Similarly, if you’re visiting coffee shops every week or even every month, you could save on this expense by making coffee at home. You can even make an occasion of coffee mornings in your house!
6. Cook your own meals
Cooking your own meals is a great way to keep costs down and help you to repay your debt quicker. This is because ingredients for meals generally cost less than ready-made meals or restaurant outings; you can often make delicious meals that rival those served at restaurants for a fraction of the cost. If you’re new to cooking, don’t be afraid to start out simple. Even a basic salad or risotto can be nutritious and delicious (and, most importantly, cost-effective). Be sure to look into cooking your own meals if you have the equipment and you’re not afraid to get experimental.
7. Freeze your credit cards
We fully understand just how tempting credit cards can be. After all, it’s just one purchase, right? It’s Christmas, or another occasion, and putting this one on the credit card can’t hurt. This way of thinking can seriously damage your finances, though, especially if you keep thinking “it’s just one, what could go wrong?”. Putting a freeze on your cards – calling the provider to freeze them, or visiting their site or app and doing it that way – can help with this. If you’re feeling particularly brave, why not cut up the card altogether, thus stopping you from ever using it again?
8. Withdraw cash regularly
One of the reasons we overspend is that we have a small piece of plastic in our hands, and we never see the physical cost of what we’re buying. If you withdraw a certain amount of cash to pay for your purchase, then you’ll see that the psychological difference between actually handing over paper money and just swiping a card is profound. Not only can using cash help to curb your spending, but it can also help you lose weight, which is ideal if you’ve gotten a little too comfortable with your eating habits.
9. Lower your energy usage
Whether you live in an all-electric property or one that uses gas as well, there are ways you can cut back on your expenses. Sort all of your energy expenditure into essential and non-essential. Heating during the winter, for example, is almost certainly essential, especially if you live in a colder property. However, leaving water on while you brush your teeth, or leaving the computer running instead of shutting it down, could be unnecessary expenses that you could save money by not indulging in.
