This week is Debt Awareness Week. A record 6.7 million people in the UK are believed to be in debt.
A survey for Debt Justice found that 13% of adults had missed three or more credit or bill payments in the last six months, a figure that rose to 29% among 18- to 24-year-olds and a quarter of 25- to 34-year-olds.
The claim is supported by data from charities showing a surge in requests for help with problem debts, and official figures published last Friday showing an increase in the number of people becoming insolvent.
Why staying on top of your debts is essential
Credit cards make it easy for people to buy things when they can’t necessarily afford them.
Consumers often lose track of their total outlay and, before long, face spiralling debts.
Unfortunately, these debts will always need to be repaid and often include high rates of interest. Paying the minimum amount means you barely touch the outstanding balance.
It is best if you aim to pay your credit cards in full each month, strengthening your credit score at the same time.
Keep track
It is vital to keep track of how much you are borrowing.
It gets harder, the more credit cards you have.
Rather than treating them separately, you need to remember that the overall total is the actual debt you have.
Make sure you read the terms and conditions of your credit card.
If you have a credit card with 0% interest, ensure you know how long you have before the interest-free period is over.
Other debts might include furniture on “Buy Now Pay Later” schemes, kitchens, bathrooms – the list of companies offering credit is endless. Think carefully before increasing your debts – ideally wait for the item and save for it.
Pay on time
Always make sure you pay all your household bills and debt repayments on time. Defaulting will cause issues with your credit status.
Never allow yourself to get into a situation that results in a county court judgment or seriously high arrears – they create a huge impact on your credit score for years to come.
Managing Debt Issues
If you have allowed your spending to get out of control or have faced adversity and are now in a situation where your debts are unmanageable seek help , to work towards moving yourself out of the situation.
The burden of financial problems can make you feel stressed and depressed.
Debt can dramatically affect your mental health.
Financial worries are the sixth most common cause of stress.
Feelings of lack of control and impending disaster are significant contributors to depression and anxiety.
The fears caused by debt problems make it significantly harder to focus on a solution.
For free debt advice:
Citizens Advice Bureau – www.citizensadvice.org.uk
National Debtline – www.nationaldebtline.org
Step Change – www.stepchange.org
I have also shared lots of information on this topic in my book ‘She Can Prosper’
The help is there.
Reach out and take a step towards getting your finances under control, which in turn will help your mental health.
Do not be tempted by payday loans or consolidation loans. This will inevitably make matters worse and leave you in even more debt.
Whilst debt issues can seem overwhelming, there is always light at the end of the tunnel. You just need the right help.
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