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How to Clear Your Debts

In the current economic climate, we all have to tighten our belts a bit and this can prove quite difficult, especially if you’ve fallen into debt.  Debt is nothing to be ashamed of, especially these days when we’re all being encouraged to spend beyond our means.  However, if you find that your debts are causing you worry and frustration, it can seem as if there is no end in sight.  It’s easy to try not to think about any money worries and put off doing something until you reach crisis point.  However, that will not alleviate your concerns and taking the time to put together a plan now could save you a lot more trouble in the future.

With banks offering unsolicited credit and the high street shops encouraging you to sign up for one of their store cards (often with an initial tempting offer) we often find ourselves in a financial position that we would never have dreamed of.  Taking out a store card can seem like a great way to save a percentage on an initial purchase, but unless you clear it as quickly as possible, this can actually lead to more expense rather than the saving you’d hoped for.  If you do find yourself tempted to sign up for a card in one of the high street shops when you’re making an expensive purchase, then by all means go for it if it means saving a large percentage.  Then, once you have your goods, instead of making the minimum monthly payment (and sometimes forgetting and incurring charges for doing so), clear the balance as soon as you are able to.

If you do have debts that are getting out of control, the first thing to do is to face the situation head on and determine that you are going to take all possible steps to clear those debts as quickly as possible.  There is plenty of help and advice available from a variety of sources such as charitable foundations that aim to help people overcome debt problems.

Take some time to go through your bank statements, checking out how much you’ve spent and see which transactions were strictly necessary and which were just indulgences – stuff you bought that you didn’t really need.  Doing this can be quite insightful and can lead us to changing our spending habits and saving money.  It’s very easy to overspend without noticing it when we charge everything to cards – you don’t see the cash that you’re spending and don’t have a wallet that is emptying to remind you that you’re getting to the end of the funds you have available. 

It’s surprising just how much money can be saved by making a little bit of effort on a day to day basis.  Look at all the “incidental” money that you spend as a result of going to work every day and see if you can make any savings there.  You could ride a bike to work instead of taking the car or using public transport.  You could take a packed lunch 3 days a week instead of eating out.  This way, you could cut down on your outgoings and save towards paying off your debts.    

 

Unless you have absolutely huge debts (for which you need to make an appointment with your bank manager and seek professional help), following the advice outlined above could set you well on the way to clearing your debts and lifting a huge worry from your shoulders.  A little bit of self-control now could have an enormous impact on your finances in the future.