Most people struggle with money at some point and debt can be scary. The most important thing about managing debt is to address it; don’t bury your head in the sand. There is a debt solution out there for everyone and we can help!
There are many different types of debt, such as mortgage/rent arrears, council tax arrears, credit card debt and loans to name a few; and there are tools available to help you prioritise your debts and budget your income.
If you are struggling with your debt and would like to speak to our team of experts for free advice, simply call us on 0333 939 7919 or complete or contact form and we will call you back.
How to prioritise debt
Priority debts are those that have serious consequences if not paid when due. They include:
Rent/mortgage payments – you could lose your home if you do not keep up these payments
Utility bills – your gas/electric can be turned off as a result of missed payments
Child maintenance – missing these payments could result in a court summons, a visit from a bailiff or even bankruptcy in some cases
Lower priority debts include:
Loans (payday, personal, bank)
Borrowed money from family/friends
There are still serious consequences to not paying low priority debts, such as court summons or bailiff visits, but they take longer to reach this point.
There are ways you can prioritise debt to pay it off faster, such as looking to clear your most expensive debt first. This is the debt with the highest interest and will continue to grow while it is still being paid off. This way you can avoid further interest charges by paying it off sooner.
You can also set minimum payment plans up for your lower debt priorities, this not only shows your creditors that you are actively trying to pay off the debt – but also means that you are continuing to lower your overall debt level with more manageable payments.
You can use the free Money Health Check tool on Money Advice Service to help you prioritise your bills and get on top of your overall debt.
Budgeting and money saving tips – Reduce your outgoings
You might be surprised at the areas in which you can make savings.
Organise your finances
Sounds like the most obvious area to look at, but, getting a clear picture of your income and outgoings will but you in a better position to identify areas to look at when making savings and changes to your spending habits.
Are you leaving lights on in rooms you’re not using? Have you looked at using energy saving light bulbs? Small changes can make a difference. Have you looked at switching energy supplier in order to get a better tariff?
Save on utility bills
There is a wealth of websites out there that allow you to compare prices from a wide range of suppliers. You may be able to get a better deal.
Save on broadband bills
How much data are you using monthly? Are you paying for more than you need? When did you last have a service review? Have you asked your supplier for a better deal? There are many broadband comparison sites that look at pricing, service level and coverage. There might be an opportunity here to make a considerable saving.
Ways to save on fuel costs
Petrol and diesel prices can be a major expense in the monthly household budget, so it makes sense to try to minimise this as much as possible. Are you aware of the price of fuel and what is considered a competitive price? Typically, motorway services are considerably more expensive than local filling stations. Keep an eye out for competitive fuel prices in your local area.
Renew your car insurance
Rather than staying with the same insurance provider year in year out, sites like go compare and money supermarket allow you to compare your renewal quote against a wide range of providers. Always make sure you’re not paying more than you need to.
Make your own lunch
Are you paying more than you need to for your lunch? Can you make a small saving on your weekly lunch bill? Key to making a saving is planning and even if you aren’t the greatest sandwich maker, you could opt for a Tesco meal deal at just £3.00 for a sandwich, drink and dessert.
Websites that can help you with money saving and budgeting