If you’re worried about money, you’re not alone. No matter how overwhelming your position may feel at the moment, there are ways to get through periods of financial difficulty, ease stress, and regain control of your finances.
We’ve partnered with Money Wellness, a budgeting and debt advice provider. Click here to take their quick questionnaire. They’ll reach out to support you with budgeting advice or debt solutions, depending on your situation.*
TotallyMoney top tips for those struggling with debt
Tip 1: Speak to a friend or family member
Speaking to a trusted friend or loved one can be a massive stress reliever. Often, the simple act of explaining your worries to someone you trust can help put the problem into perspective. This is a great starting point on your journey towards a debt free future.
There’s often a strong temptation to bury our heads in the sand and go it alone when we’re struggling financially, but bottling things up and not facing the problem can make things worse.
Tip 2: Work out what you owe and check your credit report
Making a list to get an overall view of your finances is also a great place to start. Write down all of your outstanding debts, along with current balances, fees and interest rates.
This allows you to know exactly how much you need to repay and can help you decide which debts to tackle first. In general, transferring balances from high interest debt can help you clear the balances sooner, so you end up paying less overall.
Checking your credit report can also help you to stay on top of your finances. It's completely free to check your credit report with TotallyMoney. This way, you can keep track of your balances, payment history and check for any incorrect information.
Tip 3: Make a budget
Once you know how much you owe and how your debts are spread, it’s a good idea to understand where your income goes and how the debts have built up in the first place. There are lots of budgeting tools out there that can help you manage your finances. The Money Advice Service have an online budget planner which can help you manage your money:
https://www.moneyadviceservice.org.uk/en/tools/budget-planner
Once you’ve got an idea of what you spend, you can see if you’re able to make savings on some of your outgoings. From 0% balance transfer credit cards that help you cut down on the interest you’re paying, or switching to a cheaper energy tariff, these savings can have a big impact across the space of a year.
Setting yourself a weekly or monthly budget can break the problem down into smaller more manageable chunks, helping you chip away at your outstanding debts.
Tip 4: Speak to your lender
If you’re struggling to make your monthly repayments, or have already missed payments, it’s a good idea to speak to your lender as soon as possible. Lenders have a duty to treat you fairly, and if you contact them to explain your situation, they will be able to offer you the support you need and discuss the options that could make your situation more comfortable.
This could be anything from setting up a repayment plan, making reduced payments for a set period of time, or switching to a more affordable product.
For more information on what to do if you have missed a payment, click here.
Remember, although it may seem daunting, tackling your debt or payment problems head on will help you get back on your feet sooner.
Tip 5: Speak to a professional
If you’re unable to cope with mounting debt or you have a substantial outstanding credit balance, there are organisations out there designed to give impartial and confidential advice tailored to your circumstances. A free debt advice provider can advise you, and act on your behalf to help with debts:
StepChange Debt Charity (https://www.stepchange.org/ 0800 138 1111)
Although they are unable to provide financial advice, they can offer financial guidance to your situation.
National Debtline (www.nationaldebtline.org/ 0808 808 4000)
This is a free debt service available to residents of England, Wales and Scotland.
The Citizens Advice Bureau (https://www.citizensadvice.org.uk/ 3444 111 444)
CAB provide information for many situations and can offer advice based on your specific circumstances.
PayPlan (www.payplan.com / 0800 280 2816.)
Offer free debt management plans and debt advice if you are struggling with your debt.
You can talk through your situation with these organisations, and they will help you to decide on the next best steps. Options can include debt management plans, debt relief orders, an Individual Voluntary Arrangement (IVA) or bankruptcy. They’ll explain these different options and help you to get back on track.
*Debt solutions can affect your credit rating for up to six years. There are fees for some debt solutions
What about persistent debt notices?
Persistent debt notices are sent to credit card customers who have paid more in interest and charges than they have paid off on their balance. In the notice, you’ll be asked to pay more or risk losing the card.
If you’ve been sent one of these notices but can’t increase payments right now you should contact your lender.