How to solve your debt problems

Everyone has debt problems from time to time, but simple steps can be taken to decrease or even get rid of them

08:30 29 October 2013

Denial is not an option when those debts start piling up. You have to take measures and you have to do it sooner rather than later. It's not the end of the world, but each debt you have accumulates more interest and you end up repaying a lot more than you borrowed. So here is what you need to do to solve your debt problems:

• Calculate exactly how much debt you have. If it's more than 20% of your income, than you have a problem and need to address it;

 

• Re-adjust your budget to prioritise debt repayments. The sooner you repay them, the more money you are going to save;

 

• Switch to direct debit when it comes to paying your bills – this is the best way to make sure that you don't run late and accumulate more debt;

 

• Try to find better utility suppliers and save money on those monthly costs. Then use the money you save to repay the debts;

 

• Try to transfer your balance to a better credit card or switch to a more efficient loan. This can be an easy way to repay more debt, but be careful however, as some financial companies may charge a balance transfer fee;

 

• Try to find a better mortgage deal – re-mortgaging can also be an easy way to save money and repay debts;

Once you have your plan up and going, the only thing you need to do is to stick to it. Don't use the money you save on anything else but debt repayment. Reducing monthly costs and repaying more debt should be your top priority if you want to live a debt-free life.