The problem with debt is it’s incredibly easy to get into and a huge struggle getting out of. Interest can quickly build meaning you can end up paying an extortionate amount for the amount you originally borrowed. If things get worse you can end up with red letters and bailiffs knocking your door which is an extremely scary situation to be in. If your finances aren’t in the best shape and you’re looking for ways to improve things in 2018, here’s how you can go about it.
Speak To Your Creditors
If you’re struggling to pay or are completely unable to pay, one of the best thing you can do is phone up your creditors and come to some kind of agreement. If they know your situation they may be able to offer you reduced payments, or even temporarily accept a very small token payment each month until things improve. Avoiding the situation will only make everything worse, and you will continue to be harassed.
Speak To a Debt Management Company
If you don’t want to speak to your creditors directly and feel as though you need extra help, a debt management company will be able to assist you. They will usually work to get you reduced payments as well as have the interest frozen putting you in a much better position with your money. You will pay a fee to them for this, but it’s all taken care of then and you simply make one payment to them each month and everything is covered for you.
Take out a Consolidation Loan
Instead of speaking to a debt management company, if your credit score is still reasonable, you might be able to consolidate everything yourself. Take credit card debt consolidation for example, instead of having multiple open accounts you would pay these off with another loan or card and then close them. It works out cheaper as you’re only paying one lot of interest (many consolidation cards also offer a good interest-free period initially too, giving you more time to pay it off). And instead of worrying about lots of accounts you only need to pay one so it’s easier too.
Reduce Your Spending
Finally, if you want to get a handle on your finances you have to budget and not overspend. If you’re not consolidating, cut up any credit cards you have to stop you from spending on them. That way each time you make a payment, the overall amount is reduced instead of keep being used again. Tighten the belt, cut back on luxuries and live frugally- at least in the short run so you can save more money and get debts paid quicker. Use a money tracking or budgeting app so you know exactly what needs to be paid and when, and ensures you’re not spending too much in different areas such as grocery shopping.
Is getting out of debt one of your plans for 2018? How do you plan on going about this?