1. Collect all of the information you have together
The first thing you want to do is to gather all the information about what you earn, what you spend, what you owe, and what you receive. This includes details about everything affecting the money coming in or going out. Don’t forget to include any store credits, overdrafts, and buy-now-pay-later deals. Also remember to account for school meals, birthdays, and car costs.
Create a budget and a spreadsheet to help you see everything at a glance. While it might seem tough and a lot of work, the trick is biting the bullet and not leaving anything out. When you include everything, it will be a lot easier to find ways to move forward.
2. Know your essential costs and prioritise them
Have a look at what you typically spend, what you can do without, and what is essential. Some of the essential expenditures include things like mortgage, rent, council tax, utilities, and water charges. When you’ve understood what’s essential, you can effectively prioritise that. How can you reduce your expenditure? Well, you should aim to be as realistic as possible during this stage, so that you know your plan is something you can maintain.
3. Handle any emergencies
It might be hard to open any letters marked with red, but if you pay attention to the first few tips, know what’s essential, and what you’re facing, you can first handle the real issues that could affect you and your essentials, and make a plan of what comes next. Be especially on the lookout for court paperwork. These could be things like a court date for an eviction hearing. Since there are time scales attached to these kinds of letters, you should act within these timescales.
4. Explore your options
Based on how much you owe and how much money you earn, you have options for how you can deal with debt and overcome it. Check and re-do your budget spreadsheet again and find out if there’s any money left to make payment offers. If there’s nothing left over, don’t worry – you still have a few options to handle your debts and you can still get through it. Find out what is simple payment plan and how it can help you. While there’s no one-size fits all solution, try doing some research and figure out what your options could be, and seek advice from experts.
5. Seek independent advice and support
If you need some help going through any of these steps, you are certainly not alone. Consult with experts for the support and information you need. Just make sure it’s from a free, independent source, one that is regulated by the FCA (Financial Conduct Authority), such as your local Citizens Advice Bureau. This way, you will be able to get all the guidance you need and be sure it’s in your best interests. Avoid any companies that charge you for information or advice.