Debt advice charity StepChange has prepared the following tips for anyone who is struggling with debt.
Firstly, if you’re behind on your bills, talk to your creditors - if they don’t know you’re struggling they won’t be able to help. You might be able to negotiate a payment plan with your bank or take advantage of a grant that can pay off some or all of a utility bill.
It’s important to make sure you are getting all the help you are entitled to. StepChange’s benefits calculator is a really good place to start in helping you easily identify any benefits you can claim to help increase your income and improve your situation.
Put together a budget to see where your money is going and understand what bills are the most important. This will help you take control of your finances and see where savings might be possible. Visit StepChange’s website for a step-by-step guide on putting together a budget.
Think about the priority of each of your debts. StepChange can help you with this. The priority should always be to pay your most important bills first (like housing costs). Then try to meet the minimum payment on every debt you have each month, to avoid default charges and the effect on your credit rating. After that, you should pay most towards the highest-cost borrowing – that’s the debt on which you’ll have to pay most interest and charges. If you don’t have enough to cover all this, that’s a clear indicator that you could benefit from debt advice.
Try to avoid temptation from short-term loans, sales, and online marketing for credit such as options to Buy Now, Pay Later. Taking out credit might seem like a quick and convenient way to get money fast, but it’s important to stop and think about the consequences of borrowing, and whether this may worsen your financial situation later on. Before you do borrow, think about whether you will be able to make repayments including interest.
StepChange urges anyone worried about the rising cost of living to explore the support available – the charity’s cost of living hub is a useful starting point. If you’re feeling stressed about your finances, help is available. StepChange can offer free, impartial and confidential debt advice both online and over the phone
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