The beauty of each new year is that it offers the perfect opportunity to start fresh and get your life back on track. 2017 may not have been the best year for your finances, but there’s no reason you should stay on that path. Instead, view 2018 as your chance to take back control of your finances and erase all, if not as many debts as possible. Here is your simple seven-step guide to doing just that.
1. Get To Grips With Your Debts
It’s easy to lose track of exactly how much you owe and to who. Take some time to compile a complete list of everything you owe to properly understand what you need to tackle. You can use credit report services to help you with this step.
2. Analyse Your Spending Habits
Now, draw up a detailed list of everything you typically spend each day, week, month and year. This may seem very tedious but it will help highlight exactly where your outgoings lie and where you can cut back to make savings.
3. Create A 2018 Budget
Using your list from step two, you can now categorise everything you spend into “wants” and “needs”. Then, design a monthly budget allowance which will allow you to cover all the “needs”, and some “wants”. The stricter you are here, the better off you’ll be in a year’s time.
4. It’s Time To Prioritise
Some debts are much more demanding and the lenders will be charging you higher rates of interest. It’s time to sort all of the debts you owe into a list of which need paying off more urgently, and which can be put on hold.
5. Get On The Phone
Get on the phone with each one of your lenders and see if they have any flexibility on your payment plan. If you explain your situation and are upfront and honest with them, you may be able to come to a better agreement for you and for them.
6. Move Your Money Around
Some more demanding debts could be moved elsewhere with lower rates of interest. For example, certain credit card providers offer schemes with 0% interest for the first 12 months. This should not be seen as a solution to your problem, but more of a quick fix to stop the high interest you’re losing each month.
7. Start Your Savings
By crafting an effective plan, you should start to find yourself back into positive figures and out of debt. That is not the time to lose focus. Instead, create a savings plan which sees you creating a financial cushion to prevent future debt.
Depending on your exact financial situation, it may be hard for you to completely clear your debts by the end of 2018. However, without a doubt, if you craft an effective strategy and stick to it, then you certainly will be far better off than you are right now. It may even be worthwhile you considering a debt management plan to help better manage and pay off everything you owe. To find out more about this and for debt help in Scotland, feel free to contact our knowledgeable and friendly team today.