Easy Ways to Manage Your Debt

Paying debts can be a frustrating and difficult job, and if you don’t get it right the costs can be damaging. They have a way of creeping up slowly unnoticed, with a little bit more spent here and another cost there, and soon enough you’re submerged with worry. However, the process can be reversed with patience and awareness of your finances – here are four ways you can start to win back control of your money.

Direct debits

For the five minutes that it takes to make a phone call and/or set up a DD online, it really is worth it. That’s especially true when one considers the charges for late payments (examples can be found here) and plunges into overdraft territory and more fees.

A direct debit lets you pay a certain amount off each month, from a minimum up to the full value. It also lets you choose when the money is withdrawn, so that it can be taken shortly after you get paid or whenever else is convenient.

Check your spending

The primary aim is to save money, and identifying where you’re losing it each month and changing your outgoings to cut down on waste could reap quick and attractive rewards.

A good tip is to spend as little as you can in cash and instead make payments on card, so that you can analyse everything in one statement at the end of the month – no-one can remember exactly where they spent £100 in cash 30 days after the withdrawal. Keep your shopping receipts and see if it was possible to trim £5-10 in spending, and look to apply this in the following month.

Moving and/or consolidating

If somebody asked you the interest rates you’re paying on your loans and credit cards, would you know the answer? It’s a fair bet that the answer is no, and yet a shift across to another loan or credit arrangement with a more favourable interest rate takes moments.  AAA Credit Guide has laid out many options for you to browse and choose from.

As an example, £5,000 borrowed for five years with an interest rate of 3% will cost £5,391 in total, while an interest rate of 5% costs £5,661 – a difference of £270.

Apply that to several accounts, all with varying interest rates and requiring payment at different dates, and there’s a recipe for mistakes. Instead, a single payment which consolidates your existing debts can largely eradicate this – find out more by visiting Money Advice Service website.

Planning ahead

There are a huge number of small steps that can be taken to cut hundreds of pounds in your monthly shop – the BBC show Eat Well for Less has shown the way forward.

If you’re overspending on luxuries, cut them down or out altogether. Look for vouchers online and, if you don’t have them already, apply for loyalty cards from major supermarkets and stores that you visit regularly. If it saves money and is logistically possible, try to visit cheaper petrol stations or ones that contribute points towards your store cards (eg Nectar, Tesco). Plan recipes ahead, taking advantage of any leftovers you might have, and only take advantage of BOGOF offers if you’re sure you’ll eat everything. Do it right, and half an hour’s research will equate to a huge amount of saved time and money.