Falling into debt can be a harrowing experience. It’s not only traumatic but can also affect other areas of your life. However, nothing in life is permanent. And there are several steps that you can take to find your way out of debt. In this guide, we’ll walk you through the basics of how to tackle a serious debt problem.
How to Get Started?
There are several things to keep in mind before getting started. Here are the basics.
Assess Your Situation
Before working on a solution, you must find out where you stand. Take stock of your finances and make a list of how much you owe.
Plan a Budget
Note down your monthly earnings and spending habits to know where your money is going and how to cut down on expenses. If you stick to a budget, you can slowly but surely repay a loan.
Check Your Credit Report
Check your credit report every once in a while to make sure you pick up on any mistakes that could prevent you from getting a loan in the future. Several websites break down the terminology if you’re having a hard time understanding the vocabulary.
Pay Off Debts Before Saving
While saving for the future is a great habit, there is no point in having a financial cushion if you’re in debt. Clearing your debts will save hundreds of pounds per year in interest charges.
Take Care of Your Mental Health
Figuring out how to repay a loan if the deadlines are looming can be taxing on your mental health. Always remember that you’re stronger than the situation and that the bad times too shall pass.
Ways to Boost Your Income
Additional income can help you pay off debts quicker. Here are a few ways to boost your income.
Check Your Tax Code for Overpayment
You might have overpaid your taxes. So, check your tax code every year to stay updated with tax returns.
Reclaim Bank Charges
The last thing you need when the repayment dates are on fire and finances fail is bogus overdraft charges. Check for excessive bank charges and file a claim if you think you’ve been falsely charged.
Recover Forgotten Bank Accounts
There are countless dormant investment portfolios, building society accounts, insurance policies, and pension accounts. If you think you’ve lost a savings account, sign up for a free tracing scheme to recover your savings.
Check Your Eligibility for a Marriage Allowance
If you’re married and one of you is a non-taxpayer and the other a basic-rate taxpayer, then you’re eligible for a marriage allowance from the HMRC. Marriage allowance has existed since 2015, yet millions of couples are yet to apply.
Sign up for Online Gambling
Online casinos offer a real chance of making a quick buck if you don’t get greedy. There are several reputed online casinos and affiliate sites that can help you find the best UK casino online. Find your favourite game and start playing.
How to Boost Savings?
A penny saved is a penny earned! Learn to make savings where you can.
Learn to Haggle
While this may not offer instant returns, haggling for a better deal will help you save in the long run. Not all of us can bargain at first, and it’s a skill that must be picked up.
Avoid Fancy Brands at the Supermarket
While we don’t recommend avoiding your favourite brands all the time, learning to be frugal at the supermarket can significantly increase your savings.
Don’t Be Ashamed of Using a Food Bank
Food banks are an excellent source of nutrients. A typical parcel contains enough tinned food to last up to three days. You must be referred by a professional like a doctor or social worker to be eligible.
Repaying loans can be a struggle if you’re going about it haphazardly. However, once you gain control of your debts, repayment is a breeze. The trick is to stick to a routine and avoid unnecessary expenses. And once your debts are repaid, immediately start saving money to avoid such situations in the future.