Friday 18 May 2018

Some Debts Are Unavoidable - Here's Why

So you just blinked, and suddenly here they are to haunt you, the unpaid bills that will push your bank account well into the red zone. How did that happen?

Debts, as it happens, are becoming more and more common, to the point where the majority of adults has had to deal with debts at some point in their lives. It doesn’t change the fact that it could be an incredibly stressful situation, of course, but it’s important to know that you are not an isolated case. In fact, you shouldn’t even feel guilty about it because a lot of debt situations can’t always be avoided. If you thought that your budget is in the red because of your poor financial management skills, it’s time to think again. There is no need to blame yourself as it’s not the kind of attitude that can solve the problem. Instead, you need to understand and accept that debts sometimes occur. Here’s how to deal with them effectively.

Are you using too many credit cards?

Don’t panic

While you may be tempted to put your head in your hands and scream, you need to be forcing yourself to stay calm. Panic won’t help you; it could even make things worse as you’re more likely to make bad decisions when you’re stressed out. Instead, make a cup of tea and relax your mind. Sit back, take a look at your expenses. Is there a typical pattern you’ve failed to notice? Do you buy too much food that goes to waste? Do you pay for a gym membership that you don’t use? You also need to check if the invoices you’ve received are accurate, whether it’s your credit card bill or your energy supply. You’d be surprised to know that many people don’t even check or question their expenses.

What can you do?

Once you’ve made sure that the amount you owe is correct, you need to establish a strategy to repay it. When it comes to small debts, you should be able to balance it across multiple credit cards and targeted cost-cutting. You can, for instance, reduce your energy bills significantly by doing nothing else than switching provider. Within a few months, you should be able to recover small debts. However, for more significant sums, you might need to refer to consolidation strategies, such as, to help you handle multiple debts at the same time. Naturally, you need to maintain a cost-cutting approach at home and at work to ease the pressure on your finances. Aside from energy saving tips, you’ll find that packing your lunch every day can save you a lot of money at the end of the week. You can also switch your gym membership for a run in the park.

How did it start?

It’s fair to say that in the UK, the inflation has been hitting 3% for a long time without employers reflecting it in any pay rise for their employees. As a result, everyday life items and facilities have been getting more expensive, putting your household budget at risk.

In conclusion, there’s no denying that debts are stressful. However, you need to keep your cool and stop blaming yourself for the situation. Some debts can’t be avoided, so what matters is how you sort things out!