Lots of different spending commitments place demands on your personal earnings, so finding funds for all your bills and expenses can be challenging. In practice, most UK families lean on loans, credit cards, and other forms of financing to keep up with spending demands.
As cash flow ebbs and expands, over time, successful household money managers find balance, keeping debt levels within affordable limits. At times, however, financial pressure builds, leading to excess debt, which can be hard to sort out. If you’re experiencing a bout with problem debt, timely action can help you bring the burden under control, before matters get worse.
Whether you’re on the cusp of a financial crisis, or just need help dialing back your debt, there are things you can do to reduce balances and improve your finances.
Get Help With Your Finances
Debt is a natural part of your financial life, so carrying balances doesn’t necessarily constitute a crisis. Not until debt becomes unmanageable or interferes with other aspects of your finances does it rise to crisis level. Fortunately, prompt action in the face of rising debt can help you address the problem, before it grows unsolvable. And adopting healthy financial habits can help you avoid developing financial difficulties.
Financial matters are complex, so expert advice is invaluable, when navigating your finances. As you seek help managing money and reducing personal debt, non-profit organisations are your best source for unbiased guidance. Several noted money charities are well-prepared to help you prioritize debt repayment and put yourself on firm financial footing. For-profit, professional debt counseling and other services are also available – for a fee. These entities have motivations beyond helping people work out money problems, also profiting from services they provide.
Resources available for UK debtors include these sources for help managing money.
Christian Against Poverty – This organisation not only offers personal finance guidance, but also helps struggling debtors find peace. The stress and emotional strain associated with chronic debt worries can add to the problem, making it harder to recover from financial setbacks. Easing your worry is a big step forward, so helping you find greater financial understanding as well as a positive outlook are two invaluable goals shared by Christians Against Poverty.
Citizens Advice – This debt and consumer advice organisation has multiple bureaus from which to seek in-person advice. Or you can call the Citizens Advice consumer helpline, to address wide-ranging consumer concerns. Specialised caseworkers are often available, with experience dealing with different types of money problems. The consumer organisation’s debt and money services can help you work out how much you owe and then prioritise repayment.
Borrow Only What You Need
Consumer credit takes many forms, from revolving accounts, to a variety of short-term loans, offered by payday providers. As you consider taking-on new debt, it’s important to evaluate the need for financing, as well as the cost of paying the money back. As long as you do a precise affordability check, considering all your earnings and payment responsibilities, opening new lines of credit won’t sink your finances. But if you’re already overburdened, or simply don’t have a pressing need for the money, adding new debt can have a detrimental effect on your financial health.
A few things to think about before expanding your personal debt, include these important concerns:
Are there application or loan origination fees? Lenders add charges for administering loans. Truth in lending practices increase accountability among lenders, but it’s up to you to grasp the terms and conditions of financing, before making commitments.
What are the penalties for late payment? Paying back loans on time is really the only workable option, but you should fully understand the risks and penalties associated with any new credit you open.
Do you have resources to continue making payments – even if your income is interrupted? Your personal financial circumstances are the most important things to consider before borrowing. Not only is it essential to budget for repayment, but you should also consider your outlook, should financial conditions change.
Excess debt can interfere with your long-term financial health, so it’s important to properly manage outstanding balances. Making responsible borrowing choices and seeking help from debt charities are two ways to start improving your finances, today.