If you read the interesting piece published in the Independent entitled Britain owes 72.5 billion pounds on credit cards as households pile on debt despite fears for economy you might have been surprised to learn that 8.3 million people in the UK are over indebted! If you have been struggling under the burden of debt, take comfort in these statistics as it means that you are not alone.
The good news is that being in debt right now doesn’t mean that you will be in debt forever. There are a few things that you can do to start financially recovering from debt, so that you can take a breath and get back on your feet again. And you’re about to learn what to do right now!
What to Do to Recover Financially from Over Indebtedness
By being proactive, you can start to turn your debt problem around. There’s no quick fix, but there are ways to minimize the negative impact on your life and spur on positive change. Without much further ado, here are the top 5 things you can (and should) do.
- Start living lean.
Many people approach their debt situation without the willingness to make changes. If you put on excessive amount of weight and it was affecting your health, you would go on a diet. You need to do the same thing to your lifestyle when you are trying to recovery financially from debt. Living lean is like a diet for your struggling budget. Start to cut back on unnecessary expenses. Do you really need to go to the cinema every week when you already pay for Netflix? Do you need to buy the most expensive brand of chutney when there is a cheaper version available? Do you have to buy expensive shampoo when you can take a bump down to a cheaper brand? You don’t have to live lean and cut out your comforts forever, but you need to start cutting back now to see a difference later.
- Get picky about service providers.
You probably have a variety of monthly expenses that you need to pay for each month. You probably signed up for these expenses a long time ago. Think about your mobile phone package, your car insurance, your internet provider, your heating service. All of these expenses are a necessity, but you don’t have to pay high prices if you can find cheaper prices elsewhere. Go over your bank statements with a fine toothed comb and make a list of all of your monthly services and expenses and how much you spend on each. Then make it your mission to see if you can find the same or similar service for cheaper. Any savings is a savings worth making and can go a long way towards getting you back on your feet.
- Apply for a long-term loan.
You can consolidate your own debt by applying for a long-term loan and putting it to good use. Long term loans, such as those provided by iThink Finance, are typically available between £1,000 and £20,000. Now, you might be wondering why this appears as an option, especially as you might already have a less than perfect credit score or be blacklisted. The truth of the matter is that these long term loans are designed to help people, even if they have had a poor relationship with credit in the past. If you can prove that your financial situation has changed (and is stable) and that you are handling your current debts well, a long term loan won’t be hard to achieve. Those with a poor credit score can merely expect a slightly higher interest attached.
With a long term loan, you can add up all of your outstanding debt, get the cash you need transferred into your bank account in as little as just 24 hours, pay everything off, and then just have your one small loan account to worry about each month.
- Don’t just budget better; try to earn better too.
Once you are wading your way through debt, you probably think that budgeting is the best thing that you can do, but it’s not. Just setting a budget in place will get you on the right track, but it won’t fast track your financial recovery. The best way to get back on your feet quickly is to try and boost your income. Look for part time or freelance jobs that you can do, so that you can start chipping away at your chunk of debt quicker. Look for evening and weekend jobs, offer dog walking services or a lift club. Do whatever you can to make sure that you are bringing in a few extra pounds each month. If you are supporting teenage children of legal earning age, encourage them find part time jobs to fund their entertainment expenses too. This can provide a bit of financial relief.
- Swallow your pride and negotiate your rates.
If you have credit cards outstanding, you will be surprised to find that some of them will be happy to negotiate a lower interest rate for you. This is especially the case if you have been handling your account well and if you explain your current situation to them. Even if your interest rate only goes down a fraction of a percent…over the long term, it’s a decent savings.
Recovering financially from debt is tough. It will take hard work and dedication, but if you put your mind to it and prepare yourself to put in the effort, there is every reason to believe that you will come out on top. May this year be the year that you get yourself out of debt and on the road to financial freedom once more!