Dealing with a lot of debts can be a nightmare, especially when repaying them means spending more than half of your income. In some cases, you may be looking at debt repayment accounting for 70% (or more) of your expenses; this is a sign of a debt problem to solve.
Facing a debt problem is not something to be embarrassed about. Millions of people are in the same boat, especially with the economy being as unpredictable as it is today. What you don’t want to do is ignoring the issue or not doing anything about it.
In fact, doing something about your debt problem is a lot easier than you think. You have programs, aids, and even financing options to help you repay your debts and return to a healthy cash flow. One of the ways to do it is by cutting expenses and allocating the funds towards faster debt repayment.
Start with the Loans
The best way to start reducing your expenses is by looking into the debts themselves. Some debts are more expensive than the others. You also have different repayment amounts and due dates to deal with. Fortunately, there are many things you can do about your debts.
Consolidating multiple debts – especially credit card bills – into one affordable loan is an option worth considering. You save on interest and other charges while making the entire loan repayment process more manageable. It is certainly easier to keep up with one monthly payment than ten. Lenders such as Emu.co.uk can help with this.
You should also prioritize the debts you need to repay, especially when you cannot consolidate all of them. Start with the smallest ones first, since repaying them lets you allocate the money towards other debts you still need to repay.
Make a List
Impulsive spending is your biggest enemy when you are trying to repay a series of debts. You simply don’t have the luxury of making spontaneous purchases just because there is a sale or a special offer. What you need to do instead is writing down the essential items that you need to buy before going out to the shops.
Write down all of your expenses too, including the small ones. This is a good habit to get into. It allows you to review your expenses at the end of the month. More importantly, it allows you to find more ways to save money for debt repayment.
Stick to a Budget
There is another benefit of writing down your expenses, and that is the ability to create a monthly budget. Now that you know the expenses you absolutely need, you can create a more accurate monthly budget to follow.
Allocate portions of your income towards different expenses and use the rest to repay your debts based on the priority list we discussed earlier. By sticking to a budget, you can also continue trimming your expenses until you can allocate a sufficient amount towards repaying your debts.
Use Coupons and Special Offers
When you have debts to pay, there is no amount too small to save. A 5% discount here and a £2 reduction there will eventually add up to a substantial amount. Even better, you now have more special offers and coupons to use on everyday purchases.
You can still rely on coupons in newspapers and carton boxes, but technology is an even greater friend when you are trying to save. There are apps and websites that grant you access to a wealth of coupons to use both online and offline.
Special offers are easy to find too. Similar to coupons, you can search for special offers based on location, the products you need, and other parameters. Sign up for newsletters and you can even find exclusive deals that let you save more on everyday purchases.
Buy in Bulk
Another fantastic way to save is by buying in bulk. Rather than going to the grocery store every week, you can save more money by going straight to the wholesaler. In fact, most of the everyday items you use are best purchased in bulk.
Expect to save anywhere from 10% to 50% when you buy certain items in large quantities. Plan ahead for the entire month and you’ll find an endless array of ways to save. Yes, you can still use coupons on your bulk purchases.
Buying in bulk also comes with added benefits. Since you don’t have to go to the shops often, you save on petrol and travel expenses. You are also less likely to make impulse purchases and sticking to your shopping list becomes easier.
I know how frustrating trying to repay your debts can be. That frustration usually leads to more stress, and stress leads to unnecessary expenses. Again, you are not alone.
Be patient. Allocate more towards repaying one debt, and then use the extra money to repay the second, and then the third. Keep saving money and you will find the rest of your debts to be easier to repay than before.