How to reset your debt
Particularly at this time of year, with Christmas right around the corner, you might be short of cash. If you’ve been having financial worries for some time, you might have built up a fair bit of debt. As with every difficult subject, there’s often some easy advice which can help. Read on for our top 10 tips to reset your debt.
1. Work it all out
Work out exactly what you have coming in and going out. Armed with this information, you can make better choices on where to spend your money in future. Maybe following this advice will be an alternative to myjar. You’ll be able to see all of your bills and income in one place and maybe work out what is costing you the most.
2. Budget, budget, budget
This one crops up on so many of our lists. After working out your income and outgoings, what you have left needs to be spent carefully. Prioritise the things you can’t live without like bills, food and rent/mortgage. After that, try to pay down your most expensive debt first.
3. Don’t save while you’re in debt
The interest on savings will never be as much as the interest on debt. If you have any savings, pay off your debts, it will save you money in the long run. Focus on your most expensive debt first like payday loans to have the biggest impact.
4. Remove any temptation
If you get tempted easily when out shopping or by ads online, make sure you only have the right money with you. Don’t take your credit/debit/store cards out with you when shopping, just get the cash you need out before. If you’re at home and get tempted by online shopping, leave your cards with your partner or family until you need them.
5. Boost your income
We know this one sounds obvious and the hardest to do. Have you thought about renting a room out if you have one spare? Become a part time delivery or taxi driver if you’ve got a car and your license. Companies like uber and yodel always need drivers and quite often the schedules can fit round you. Renting out a room can get you up to £4,250 tax free.
6. Sell your old stuff
Clear out your cupboards and wardrobes, anything you’ve not used for a year, sell it. If you’ve outgrown clothes, list them on an auction site and see how well they sell. Any income is better than the item sitting in a cupboard or drawer. Some items might be collectibles so do your research first and see what to sell at. Some old kids toys can be worth a lot more than you paid, even when well used.
7. Cut your costs
The easiest bills to cut are your utilities and food bills. For the utilities, go on a price comparison website and enter your current details. If you find an energy provider charging less, the website will probably do the work for you and swap you over. To reduce your food bill, don’t buy too much food and do a meal plan. By planning a week in advance you can buy larger packs saving money over the week.
8. Move your debts
Move your debts to the cheapest provider, interest rates change all the time. Find the cheapest option and as long as you don’t get tempted to borrow more, it makes sense. Try not to reschedule your loans over longer durations, you might get tempted to borrow more. Pay it back as quickly as you can with the lowest interest APR possible.
9. Talk to the loan companies
If you’re really struggling, talk to the people you owe money to. Maybe it’s friends and family, short term loan direct lenders or the bank. They will all be used to people being short of money at some point and wanting to reset your debt. It’s in their interest to help you pay so give them a call and see what they can do.
10. Ask for help
It can be a lonely problem being in debt. One of the steps to reset your debt is to ask for help. Try speaking to friends and family, don’t bottle it up. If they can’t help, try For more help and information, please read the following Fact Sheet from the FCA and be sure to visit the free Money Advice Service for more help.