7 Tips for getting out and staying out of debt

 
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1. FACE UP TO THE FACTS

The first step towards a debt-free future is to admit that you have a problem. Don’t bury you’re your head in the sand as this will only make things worse and you could end up paying back far more than you originally owed.

Debt is nothing to be ashamed of, so accept your issue and begin tackling the problem. If you’ve received a letter from Dukes, start by getting in touch with one of our friendly office staff by calling the 01785 825 500 or speaking with them via LiveChat. They’ll go through your repayment options and help to resolve your problems as quickly as possible.

2. GET ORGANISED; LIST YOUR INCOME AND EXPENSES

Start by looking through your recent bank statements and making two columns: one for incomings, and one for outgoings, this will help you see exactly where your money is going. Now you’ll have a clear idea of exactly how much money you can afford to put towards repaying your debts and will highlight areas where you might be able to cut back your spending.

3. PRIORITISE YOUR DEBTS

Assess which outgoings are completely necessary. Your debts should of course come first, followed by any bills, direct debits, and standing orders. Focus on paying off your priority debts (such as council tax), whilst paying off the interest and minimum amounts on your credit cards and loans. Once you’ve cleared your priority debts, don’t start splurging. Instead, increase your monthly payments towards your other debts and watch them clear one by one.

4. MAKE CUTBACKS TO REDUCE YOUR EXPENSES

Now that you’re starting to make your way out of debt, it’s time to make sure you stay out. Start by cutting down on what you don’t really need, starting with direct debit payments. Are you really using that gym membership, magazine subscription or movie and music streaming service? Instead of paying for expensive Sky or Virgin TV packages, look at lowcost alternatives like Netflix or Amazon Instant. Small changes like this can more than halve your outgoings, giving you more expendable income.

5. SHOP AROUND FOR SAVINGS

A good place to start saving money is with your weekly shop. Plan ahead for the week’s meals so that you’re only buying ingredients you will use and are minimising wastage. Use comparison sites to make sure that you’re on the right mobile tariff, and aren’t paying too much on your energy bills. It’s also worth calling your current providers - you’d be surprised at how much you can save just by asking.

6. BOOST YOUR INCOME

After you’ve cut all you can, it’s time to start boosting your income.

• Check you're receiving every tax credit that you might be entitled to.
• Turn your household clutter into cash by selling old items on eBay.
• Rent out a spare room or a car parking space if you live near a station.
• Make money online - whether it be paid surveys or mystery shopping, there are plenty of ways to make money online. Have a look and see what would work for you.

7. NEVER BORROW MORE MONEY TO PAY OFF DEBTS

Although quick fixes like payday loans may seem like easy money, they often come with phenomenally high rates of interest and numerous other charges if you pay late.

Defaulting on paying off the loan could do further damage to your credit rating. Focus on the existing debts, and when you’ve paid off what you owe, take the money that you were putting into repayments and put it into savings. This will give you a healthy financial buffer in tough times, while also giving you a pot of cash to use for everything from debt-free holidays to brand new cars.