However you look at it, the reality of the matter is that it has increasingly become difficult to get the necessary credit facilities when deeply embroiled in debt. The world as we know it gives preferential treatment to men and women that are financially prudent and tend to look the other way when those with a poor credit score come calling. It is, in no uncertain terms, a situation that puts individuals with a less than average credit score in a precarious position.
Getting a car loan, a mortgage or even a credit card has become an uphill task for UK citizens struggling with bad credit. While there are lenders who offer bad credit loans out there, what people need to concern themselves with is how to get out of debt as soon as possible. It is for this reason that debt management should be closer to the hearts of many people. That said, let’s take a look at 5 principles of debt management.
Understand your debt situation
It is not enough to feel pity for yourself that your knee deep into debt. The first step to getting out debt is acknowledging it and correctly assessing your debt situation. Draft a list of all your debts or even draw a chart or graph – whatever you are comfortable with. The aim should be having an accurate analysis of how much you owe in order for you to chart the path towards recovery and being free from debt. Also, endeavour to check your credit score while you are at it. It will give you a clear trajectory of how you ought to go through the whole process of debt management and recovery.
Create and stick to a budget
Debt management is all about taking control of your expenditure. You can’t in all honesty say that you are working towards getting out of debt when you have no idea how much money you are using or what portion of your money goes into what. Endeavour to make and stick to a budget. Control your expenditure and focus on saving as much as practically possible. Stick to your budget, avoid impulse buying and focus on your goals!
Work on clearing off your debt one at a time
When it comes to paying off your debt, endeavour to clear high interest attracting debts first as you move down to low interest attracting debts. By so doing, you will do away with the accumulating interest rates that make it difficult for you to get out of debt. Clearing high interest attracting rates first give you peace of mind and motivation that you are on the right track.
Take into consideration debt consolidation
Granted, getting out of debt on your own can be a tad difficult. You might feel overwhelmed and disenfranchised with so many calls from people or organisations you owe. In such circumstances, you should consider debt consolidation where a professional firm will negotiate on your behalf and consolidate all your debts such that you make just one payment every month.
Last but not least, there is no shame in admitting that you are deep in debt and therefore need help. Go for debt counselling to get the right help with debt management. Above all, keep your expenditure in check and have an open mind. There are a lot of people who have been in your shoes but who with help have been able to get the necessary help and recover from debt.