THE nation’s personal debt mountain is set to almost double next year – so if you overspent at Christmas, this is now the time to cut back.
The Government’s Office for Budget Responsibility estimates the total cost of servicing personal loans, mortgages and credit across all households was £60billion this year – and could be £107billion in 2023.
别担心, there are ways to ensure you are not overwhelmed by 债务.
Here is my plan to help get your finances back on track.
By following these tips you could be thousands of pounds better off . . .
Six step plan to boost finances
STEP ONE: Take stock of your finances.
I usually sit down with a pen and paper or set up a spreadsheet and make a note of all my outgoings and income, plus any outstanding debts.
STEP TWO: If your outgoings are more than your income, work out how you can cut back.
Re-assess bills and costs to see where you can make cuts to get back on an even keel.
If you keep owing more than you make, you’ll end up pushing yourself further into debt.
STEP THREE: Can you consolidate any of your debts by transferring them to an interest-free, balance-transfer credit card or taking out a low-rate personal loan?
Do your maths and work out the cheapest method.
But only those with top credit scores can get the best deals.
Use an eligibility checker such as MoneySavingExpert’s to find out which product you will be accepted for without damaging your credit history.
STEP FOUR: Now work out how you could increase your income.
Whether you take on extra work or find a way to make money on the side, do take into account any extra tax you might have to pay.
Also use a free calculator such as at entitledto.co.uk to check if you’re missing out on any benefits.
STEP FIVE: Decide which debts to pay back first.
Make a note of priority debts such as your rent, 抵押, council tax, TV licence or child maintenance.
Then look at how much you owe elsewhere and see how much you need to repay each month and what is left over.
如果你可以的话, pay more than the minimum amount required because you will clear your debt more quickly.
After working out the monthly repayments you can afford, consider setting up a direct debit so that the cash comes out automatically each month.
STEP SIX: Find your method. If you are strict and know that you’ll stick to your plan, prioritise the debt that costs you the most and can be repaid in the shortest time.
If you’re the kind of person who thrives on reaching goals, it may be better to pay off the smallest debt first, irrespective of how much it is costing.
This may cost you more but if you keep on track with paying off your debts, it will pay off.
Set yourself realistic goals.
There’s no point planning something you won’t achieve.
Above all, go easy on yourself.
Paying back debt is hard — but taking these steps will make you feel in control and take worry off your mind.
My three rules to make you richer
DECIDE on some rules to stick to in the new year.
Write down three realistic financial goals and try to make them specific to what you want to achieve.
Here are my three to inspire you . . .
DO A MONTHLY CHECK-UP: It’s all too easy to let unused subscriptions or rising bills go unnoticed.
I’m putting a reminder in my diary once a month to set some time aside to check on my budget, goals and finances so that I stay on top of things.
SET A BUDGET FOR “FUN”: I do have a tendency to spend any leftover disposable income on fun things such as make-up or clothes.
I don’t want to cut all joy out of my life but setting a limit on how much I spend each month will help me save more.
CONSOLIDATE MY PENSIONS: I’ve been lucky to have a few jobs over my 16 years as a journalist but that means my retirement saving pots are in different places.
I might be able to boost my savings — and avoid paying extra fees — by putting some of them in one place.
Only consider this after getting the guidance of a trusted financial adviser.
Worried? Get help
IF you are still struggling to make payments, or if money worries are keeping you up at night, best get free personalised advice from a debt charity.
Contact Citizens Advice, StepChange or the National Debtline.
They will come up with a plan to help sort out your finances.
You can also ask your existing creditors for “breathing space” while you work out a plan.
Firms should allow you to freeze interest, fees and charges on debts and pause enforcement action and contact from creditors.