The Rare Gang

Sometimes, effective debt management can be as simple as learning to control it properly. There are two main ways you should try to do this: by stopping it growing, and by ensuring you can’t accumulate any more debt.

Budget with your money
You might surprise yourself with how much easier managing your finances can be with a budget. Too many people simply earn their salary and spend it as they go along, which can often mean they fall short as the month goes on. If this causes debt repayments to go unpaid, the problem can become quite serious.

However, by working out a budget, this scenario can often be avoided. For example:

• You earn £1,000 per month (after tax)
• Rent/mortgage payments are £350 per month
• Total household bills come to £200 per month
• Average spending on groceries is £100 per month
• You are repaying a loan at a rate of £200 per month

In total, your essential outgoings are £850 per month, leaving you with around £150 - which you can either spend, save, or make overpayments towards one of your commitments.

If you don’t budget this way, it’s much harder to gauge how much you can spend on non-essential things - and this is how many people end up overspending.

Of course, not everybody’s situation is this simple. It may be that your outgoings exceed your income - in which case you should speak to a professional debt adviser as soon as possible to discuss your options.