Hi again, today we are looking at a topic that affects an increasing number of homes in the UK, and it’s a subject of many people’s New Year’s resolutions. Our main activity today is to tackle household debts. These debts do not include mortages or student loans, unless you’re in arrears with your mortgage repayments.
[If you don’t have any debts, congratulations! There’s an alternative activity for you at the bottom of the page.]
So, looking at household debts, you may be at one of many stages, for example:
- Pretty sure you’re in some kind of trouble after Christmas
- Overspent for a long time but too scared to admit it
- Probably in some level of debt, but not sure how bad it is
- Definitely in debt, and running up even more borrowing
- In debt, and aware of all the places you owe money to
- In serious debt, scared, not sure what to do
- Debt management plan in place
If you know or suspect that you have debts to deal with, it’s time to take action. The steps are:
- Stop overspending if at all possible
- Work out how much you owe and to whom
- Stop debts getting worse (for example switch to cheaper borrowing, writing to creditors)
- Make a debt repayment plan
Some people, myself included, might only have one small area of borrowing. I owe a little on my credit card this January, but that’s my only borrowing and I’m not planning on adding to it during January. If that applies to you too, all you need to do is work out a plan for how you’re going to pay it off over the next few weeks or months.
For other debt situations, one of the best things you can do is to get advice from a debt charity or a non-profit organisation such as Citizens Advice.There are helplines and online chats with advisors if you’re feeling worried, and there are lots of resources available on their websites.
StepChange Debt Charity has an online Debt Remedy tool that’s available 24 hours per day. It takes about 20 minutes to use from start to finish, and it gives you tailored debt advice.
Other charities include My Money Steps (from National Debtline) and Debt Advice Foundation, and there’s extra information at the Money Advice Service.
Remember that you’re not alone, and there’s lots of help out there. If you’re feeling stressed about debt, talk to one of the charities mentioned above, or speak to a trusted friend or relative about it. You can also get help from your GP or the Samaritans helpline (116 123, calls are free).
If you already have a debt management plan in place, you’re making the repayments, and you aren’t continuing to borrow then just use today to have a quick look at the plan. Make sure you didn’t go off track during the festive season, and keep going with the repayments.
For the people who have no debts today, your alternative activity is to look at savings. Find out where the best savings rates are at the moment by looking at Savings Champion, and start moving your savings to get better rates if possible.
Are you tackling debts as we go into the New Year? Or are you looking at savings today?