Thursday, 23 July 2009

Get serious about debt problems

posted by debts.org at 02:27

How to clear your debts


In order to clear your debts you need to completely change your mind-set. If the days of luxury holidays, new cars and expensive jewellery are just a distant memory, then it´s time to join the real world and face up to your financial situation today.

Debt problems and how not to tackle themIf you have debt problems, the worst thing you can do is think ´I owe £20,000, why not add another £1,000 for a holiday? It won´t make much difference.´ Yes, psychologically, when you get home with sunburn and see yet another credit card statement on the mat, it will make a big difference. Your debts will spiral out of control and your health could also be affected.
Risking repossession of your house


If you are still finding the money, or credit for life´s luxuries, but neglecting your priorities, you could find yourself risking repossession of your house. Be honest with yourself and work out the best way to reduce your debts, not increase them.Things you should do to reduce debt


• Ensure your scheduled payments are set up to leave your account the day after your salary is paid into it. This way, your debts will be paid before you are tempted to spend your money on something else.


• Consider taking a second job until your debts have been cleared.


• Consider taking a lodger, and check out the government´s rent a room scheme, which means you can receive up to £4,250 a year tax free from the tenant. For more information on this, check out www.direct.gov.uk . You would need to check how this would affect any benefits you are receiving, but could be a good way of finding a solution to your debt problems.


• If you have a garage or loft full of old furniture, clothes or toys, consider doing a car boot sale. These are not only good fun, but you can also earn some good money. Remember, one man´s trash is another man´s treasure, so don´t throw anything away which could be useful to someone else.


• If you use the same supermarket for food and petrol, collect your points for future discounts and special offers. Loyalty points add up and you could end up doing your entire shop for Christmas on the strength of them. Avoid further debt problems, by collecting points instead of more debt on your credit card. Alternatively, check out the local market for fresh fruit and vegetables – you could save a packet.

What NOT to do if you have debt problems

• Only use a debt management or a debt specialist company who will give free advice and guidance.

• Never be tempted to loan money from unregulated companies with astronomical interest rates. Your debt will never be cleared, and you will be hassled continually if you miss a payment.

• Always take a shopping list when you go to the supermarket, and never shop when you are hungry – you will be more likely to throw things in the trolley you don´t really need, or you can´t afford.

• Always look out for special offers in the supermarket including 2 for 1, or buy one, get one free. Particularly look for offers on things you will always need such as washing powder, soap etc.,

• When buying clothes, look around the charity shops, where plenty of bargains can be had, including designer gear.

If you feel your debts are drowning you, and there is no way out, contact debts.org who can arrange a debt management plan (DMP) or an Individual Voluntary Arrangement (IVA) or help find a debt solution to suit your needs. Our friendly, trained advisors are here to help, and we offer free professional advice and a sympathetic ear.

Labels: christmas, job, tenant