{"id":1355,"date":"2021-01-10T20:13:00","date_gmt":"2021-01-10T20:13:00","guid":{"rendered":"https:\/\/employeesmatter.co.uk\/?p=1355"},"modified":"2021-01-10T20:13:03","modified_gmt":"2021-01-10T20:13:03","slug":"better-with-money-better-with-debt","status":"publish","type":"post","link":"https:\/\/employeesmatter.co.uk\/better-with-money-better-with-debt\/","title":{"rendered":"Better with Money: Better with Debt"},"content":{"rendered":"\n

Whilst \u201cbeing in debt\u201d has largely negative connotations, it is a normal part of managing our finances. Be it a student loan to fund university, a mortgage to buy a home, a new mobile phone contract or a credit card, debt allows us to spread the costs of things, makes them more affordable, and having the option to \u201cbuy now, pay later\u201d is particularly useful when it comes to the bigger purchases we make in life. After all, there are few people who could hope to save all the money needed to buy a home without needing a mortgage!<\/p>\n\n\n\n

If we make debt repayments on time and manage our debt, it can help transform and enhance our lives. However, if debt begins to get out of control, or a change in our personal circumstances makes meeting monthly repayments a struggle, debt has the potential to truly destroy lives.<\/p>\n\n\n\n

Unfortunately, many people still consider those who get into financial difficulty as being reckless. They have overstretched themselves, been greedy, and have borrowed money they could not afford. Whilst this may be true in some cases, the reality is that everyone has the potential to get into financial difficulty, especially when financial uncertainty is caused by things beyond our control. The Covid-19 pandemic during 2020 is a case in point. A recent Which? Magazine<\/em> survey found that 50% more UK households defaulted on at least one housing, credit card, loan, or bill payment in October 2020, than in the previous month. This not only highlights how debt issues are affecting more people, but it also shows that, for many, the line between debt discomfort and debt crisis is worryingly thin.<\/p>\n\n\n\n

If you then consider that a 2019 survey by the debt charity Christians Against Poverty found 75% of people who sought help for their debts had become physically or mentally ill because of the stress and anxiety their financial situation was causing them, a growing debt crisis has the potential to seriously impact your physical and mental health. Clearly, it is better to deal with debt before it becomes a problem.<\/p>\n\n\n\n

A debt action plan<\/strong> involves a few simple steps which can be the difference between managing debt and having it spiral out of control:<\/p>\n\n\n\n

  1. Stop borrowing – <\/strong>It sounds obvious, but it will be harder to deal with existing debts if you keep adding to them. Make sure you\u2019re paying the minimum payments whilst you\u2019re sorting out your debt action plan<\/li>
  2. Work out your budget \u2013 <\/strong>Use a budget planner (Budgeting & Saving – Better With Money<\/a>) to work out your income and outgoings each month to identify if you have a shortfall and where you could save money. If you live with a partner and are dealing with your debts together, fill in your budget together.<\/li>
  3. Reduce Outgoings \u2013 <\/strong>See if there are any non-essential subscriptions or direct debits you could cancel or whether you could save money on your bills or insurance by shopping around. Could you prepare a food planner and buy only the items you need or use vouchers to reduce your grocery spend? Could you move existing high interest debt to a cheaper loan or 0% credit card to reduce monthly payments?<\/li>
  4. Maximise Income \u2013<\/strong> Are you claiming the state benefits you\u2019re entitled to? Find out by visiting www.entitledto.co.uk<\/a> website for your benefit eligibility.<\/li>
  5. Pay off priority and high interest debt first \u2013<\/strong> Don\u2019t split your money between your debts equally. Pay at least the minimum on all but pay as much as you can on the priority and most expensive debts first. When these are repaid, shift focus to the next highest rate debt and continue this until you\u2019re debt free.<\/li><\/ol>\n\n\n\n

    If you have spiralling debt and can\u2019t make the minimum repayments or don\u2019t feel mentally strong enough to get to grips with your debt, then please ask a debt adviser to help you. You can contact one of the non-profit debt counselling organisations shown here BWM_Debt_CharitiesV2 (betterwithmoney.com)<\/a>. They have qualified debt advisers whose job it is to help you, not to make money out of you and they provide their services for free.<\/p>\n\n\n\n

    These organisations will help you regardless of whether you\u2019re a hundred pounds in debt or hundreds of thousands of pounds in debt and 80% of people who seek help feel more in control and happier after doing so. Don\u2019t suffer alone, reach out and get the help you need.<\/p>\n\n\n\n

    Author: Sarah Steel, Director, BetterWithMoney.com<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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