Be calm, be realistic
Many people have a problem with debt at some time in their life – it is absolutely nothing to be ashamed of. Equally, debt is something that will only grow if it’s ignored. So recognise you are not alone, that you are bigger than your debt, and that there is a solution for every situation. Above all, be honest about your debts and realistic about what can be done – some solutions will take time.
Budget, budget, budget
It sounds simplistic, but learning to budget is the key to healthy finances. A budget will show you exactly what you’ve got coming in, how much you’re spending and how much you’ve got to deal with your debts. When you know what’s left after essentials, free debt advice (from organisations such as StepChange) will tell you what solutions are available.
Budgeting templates are available online, but if you do it yourself, work it out on a calendar monthly basis, as this is when most companies need to be paid. Also, always make sure you’re paying priority bills first, such as mortgage, rent, gas or electricity. Finally, consider keeping a spending diary to pinpoint any wasteful spending.
New year, new you
Remember that it’s your money, so you are in control of it. One of the most important things we advise our clients is making sure their money is safe. When you’re in debt, you need to make sure household bills are paid rather than the money being taken by unsecured debts. So set up a new, post-Christmas, basic bank account if you have a debt with the same bank that your current account is with.
Give yourself some credit
Resolve not to resort to high-interest credit such as payday loans for a quick post Christmas fix – this is unlikely to lead to a happy new year. Instead think of alternatives: can friends or family help? Is any extra work available? Can anything be sold on Gumtree or eBay?
The Scottish Government is encouraging those wishing to borrow to consider credit unions, which offer a range of services including loans, savings accounts, current accounts, pre-paid debit accounts and mortgages. Over 300,000 Scots are members of a credit union, with 400 said to be joining each week.