How to Overcome a Debt Problem

Adult life can be tricky, and expensive. It is easy to build up so many outgoings from rent, mortgage payments, various bills, studying etc. Not being able to pay these as soon as they come in and opting to borrow money can lead to huge financial debt and is often a downward spiral. That’s where we come in, we have put together some solutions for how to overcome a debt problem…

Identify the problem

Firstly, it is important to identify why you are in debt. Is it down to irresponsible, unnecessary spending or did you recently lose your job? These are entirely different circumstances, requiring different approaches to improve your financial situation. If you simply need to reduce your spending, this can be done fairly easily. To begin with, cut down on frequent luxuries like online shopping and expensive meals out. Small savings can make a big difference and you could soon be out of debt and back on track. On the other hand, if you have recently lost your job and are struggling with no income, this is less of a quick fix and debt can quickly build up. However, there are many options for help and support out there so don’t panic.

Analyse spending habits and set monthly budget

Having a record of your exact income and outgoings each month can really help you visually see exactly what you are spending and what you could change. There are some great resources out there to help you do this including banking apps such as Monzo or Starling that allow you to track your spending as well as set budgeting apps. By tracking exactly what you are spending, you can pin point what is causing you to struggle financially and begin making the necessary changes. This may be as simple on cutting down on luxuries or missing out on a holiday this summer or, it may be bigger. If you are in more significant debt, there are things you can do to action change.

  • Check for grants and support – your bank or the government has many systems in place to help those in serious need and alleviate your money troubles.
  • Re-mortgage your house – this can work to reduce monthly payments on your property and make them more manageable.
  • Switch bank or credit cards – you may not currently be with the best provider for your circumstances and could be getting more benefits elsewhere.

Prioritise

Setting budgets and changing spending habits comes with prioritising. If you are in serious financial debt, there is no way you can be prioritising a holiday with friends over this month’s mortgage. As disheartening as it is, getting yourself out of debt often comes with sacrifices. There may be a couple of months where minimum spend is necessary and going out every weekend has to stop. However, it is important to think of the benefit this will have in the long run. Plus, there are plenty of fun activities you can do for free with your friends and family during this more strenuous time.

Confide in family and friends

Often, close family and friends would be more than willing to support you financially if their means allow it. This can be a daunting prospect and it is understandable why you wouldn’t want to burden others with your problems, however, there is no harm in asking. Those in more fortunate circumstances may be able to cover some of your outgoings for a month or simply pay for that upcoming event that you have to attend. If not, confiding in those closest to you when you’re struggling will still bring you relief and comfort allowing the people around you to support you, even if it is not financially.

There are also other options such as debt counselling where you can receive one-on-one help and support with the problems you are facing. Alternatively, here at Ealing Trading, we offer short term loans with a manageable payback scheme. Get in touch to apply today.

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