Debtbusting Made Simple (part two)

Following on from my previous article Debtbusting Made Simple (part one) we are now going to address the final three debtbusting steps.

Reduce Expenditure

You may not like hearing this, but reining in spending is key to your financial recovery. If you really want to say goodbye to out-of-control debts you will have to be self-controlled. A recent survey found 30 percent of British people feel their salary is not enough to live on but if you are regularly spending beyond your means, you will end up with debts you are unable to pay back.

Break your expenditure down into simple categories. Look through recent bank statements so you can work out what you can save, and what expenditure is really necessary. Set yourself a realistic week by week allowance and stick to it. Some people find that withdrawing the cash they need for the week, and not using debit/credit cards, helps them keep control of spending. Others I know, put their credit card in a block of ice in the freezer so they really have chance to consider whether they have to use it by the time it has defrosted!

In addition to reducing expenditure, perhaps you could think about a pay rise at work, or taking on more work in other areas? Is an additional evening or weekend job a possibility?

Keep in touch with Creditors

If you have followed the advice above and have managed to cut down borrowing costs and spending but are still worried about debts, do keep in touch with the lenders involved. Explain to them that you are having difficulty with the repayments. Some lenders may be prepared to freeze interest on a debt or lower monthly repayments.

Take free debt advice

If you have serious debt worries, advice is on hand. There are a number of advice services and debt counsellors who can offer constructive advice with regard to your individual debt problem.