MoneyExpert’s own study into the health of the nation’s finances has discovered that collectively we’re increasingly concerned about the state of our finances and in particular our levels of personal debt.
Debts which won’t go away
The MoneyExpert study found that 38 per cent of people around 13.1 million of us with debts on products such as credit cards, loans and mortgages, were worried about whether we would be able to repay them.
Amongst those with debts more than one in four said that their levels of debt have also increased over the last 6 months.
Take control of your finances
While debts can be a major cause for concern if you’re worried it’s crucial to ensure that things don’t get on top of you and that you take proactive steps to managing your finances.
Step 1 – draw up a list of what you owe and when it needs to be paid by. Once you have a clear idea of what your debts are you can begin to make plans
Step 2 – is to prioritise. If you have a mortgage then this probably your most important debt. Make sure you meet your monthly payments, if you continually miss them you could find your home repossessed in the worst case scenario.
Step 3 – it goes without saying that if you’re trying to reduce a large debt then one way of the easiest way to do this is by reducing your day to day spending on extras or luxury items such as take away coffees or clothes shopping.
Step 4 – switch to a better deal. The majority of us have a credit cards but a large number of us fail to switch to a better deal once the zero per cent interest period expires. Leaving a £3000 debt on a 16.9% APR credit card could mean that your debt increases by as much as £500 over a year. If you transfer your balance to a zero per cent deal you can cap the debt and start making repayment on a debt which isn’t expanding.
Step 5 – meet your payment deadlines. As was already mentioned with mortgages, failure to make payments on time can have negative consequences. While things rarely go as far as home repossession thousands of us miss the occasional mortgage repayment or credit card bill. All repayments are tracked by credit rating agencies and failure to meet the bills will mean a black mark on your credit rating. Even one or two missed payments could leave you unable to get credit in the future.
Where to turn
If things are getting out of hand and you need expert advice it could be worth your while picking up the phone to the Consumer Credit Counselling Service. They will be able to help you put together a full debt management plan and provide the support you need.
Getting on top
Few of us want to spend our evenings or weekends pouring over credit card statements and mortgage bills but it’s absolutely crucial to make time to do this. Burying your head in the sand will only lead to bigger more expensive debts, tackling things head on will mean you know exactly what needs to be done.