Managing debt

Top tips on how to avoid getting into debt

Avoid overspending! Keep a regular note of everything you spend, and what you have left. Maybe give yourself an ‘allowance’ each week, taking out just this amount of cash and avoid using your debit card so much.
Many people get into trouble with credit cards. If you can’t trust yourself to pay back the money quickly, then avoid getting one. But if you do decide to get a credit card, try to choose one with a low interest rate.

Top tips on how to stop debt from mounting up

Don’t panic…but don’t bury your head in the sand either. Sit down, and make a list of exactly how much you owe and who to.
Tell someone about your financial worries – family, friends or a debt support organisation. They can help you cope with the stress of the situation, and help come up with practical suggestions about how to resolve it.
Contact the companies you owe money to. Most will be sympathetic and work out a way for you to pay it back in smaller amounts or at different times.
The bills you should pay first are mortgage, rent, service charge and utility bills. Your next priority should be credit and store cards. Pay off those with the highest rate of interest first, so you avoid paying more for longer. You could also switch your balance to a credit card with a lower rate of interest – many companies provide special ‘balance transfer’ deals.
If you are trying to save money but are creeping further into debt – stop. Pay your bills first, and start to save when you can afford it.

Beware of debt management companies!

Debt management companies manage people’s debts on their behalf. What a lot of people don’t know, however, is that the debt management company will charge an ongoing administration fee for the service.

The good news is that free advice and help is available through a variety of organisations, including the Citizens’ Advice Bureaux and local advice agencies.

The National Debtline and Consumer Credit Counselling Service websites are also very useful, as they offer free advice and guidance on how to approach creditors, along with pre-written letters that you can personalise with your own information.

If you would like more information or the details of local advice agencies in your area, then please contact 0115 988 7100 and ask for the Income Team.