5 Ways to deal with debt

When you're facing a mountain of debt, knowing how to tackle it can be tricky. But, before you think about downsizing your home, renting out your spare room or selling off your family heirlooms, here are five simple strategies to help you get your debt under control.

1 Assess your debt

It's impossible to implement debt-busting strategies until you know what you're up against. If you're not sure who you owe, or how much you owe them, take advantage of your free credit report to find out – you're entitled to one from each of the big three credit bureaus each year. Then, once you've got a clear picture of your debt situation, sit down and…

2 Draw up a budget

If you don't already have a budget in place, it's time to put things right. After all, there's an excellent chance that your lack of a budget is one of the things that landed you in debt in the first place. Simply put, a budget is an evaluation of what you earn vs. what you spend. And if you're spending more than you earn, you're in debt, in which case it's time to…

3 Make a repayment plan

Start by prioritising your debt and tackling those debts with the highest interest rates first. Next, decide how much you can afford to pay back each month (at the very least, pay the minimum amount required) by looking at your budget and deciding where you can cut back. These adjustments may be as simple as reducing the number of times you eat out or order takeaways in a month, or, you may need to rethink your entire grocery budget until you've squashed your debt. Whatever your repayment plan demands of you, stay committed – the end result will be worth it.

4 Pay on time

The last thing you need when you're already in debt is late fees. If you're struggling to keep track of your repayments, consider putting together a repayment calendar, where you diarise when each creditor needs to be paid, and how much you owe them.

5 Change your spending behaviour

The golden rule when you're in debt? Don't get into more debt. While that's often easier said than done, these simple strategies can go a long way towards helping your situation:

• Stick to your budget by tracking your spending.
• Use cash instead of a card – handing over a credit or debit card makes spending way too easy.
• Understand what triggers your spending. Is it browsing online or in your favourite store? Your mood? Pressure from your friends? Once you've identified your vulnerable situations, you'll be able to avoid them.

And, if you're still struggling to get your spending under control, print out this sage advice from poet Ogden Nash and stick it somewhere prominent: "Some debts are fun when you are acquiring them, but none are fun when you set about retiring them."


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