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Is your financial burden too heavy?

I think one of the best things about being a child is never having to worry about money. Then you grow up, have a family and your financial situation is more important to you than ever before.

In a country where personal debt amounted to £1,423 million at the end of March 2013, it’s no surprise people are desperately trying to dig their way out of debt. The scariest statistic is that over two hundred people are declared insolvent each and every day in the UK.

So if your financial burden is too heavy and is getting you down, it’s time to make some changes for the better.

Cut your financial burden into little pieces

In order to make a change you need to break the vicious cycle of debt. People who are in debt find themselves even deeper in debt months or years later. It’s a cycle that is very difficult to get out of, it’s almost like the roundabout won’t stop and you can’t get off.

You need to make a concerted effort and want the change in order to start making a difference.

Put a stop to luxuries

Are those afternoons at the day spa that important? Do you have to go out with friends every night of the week? You’ll be amazed how much money you can save by cutting back on the luxuries.

Choose to cook a homemade dinner at home and have friends over, it will cost you a fraction of what it would cost if you were heading to a local restaurant.

Take the money you save from cutting your luxuries to a minimum and use that money to pay towards your debt repayments. Remember wherever possible to pay more than the minimum payment, this way you can reduce the debt faster and pay less. Each payment you make the interest needs to be recalculated, the more you pay the less the interest will be.

Know your budget

We all know how much money our household brings in each month. The reality is that for many households that income doesn’t cover the debts that are due each and every month, which is why we need a budget and we need to stick to it.

With eighty or more properties being repossessed on a daily basis, a budget has never been so important.

I always recommend you start your budget with the basics, your mortgage or rent repayments, you need a roof over your head; then utilities and food. Now you can take the balance and put it towards your debts, from credit cards to personal loans.

Set up a payment plan

With your budget in place you can easily determine what bills need to be paid and when, set up a calendar with the days you need to make your payments to ensure you don’t forget any.

Remember some payments may take a few days to reflect on your account; this is the case with many store cards. This means if you pay the amount on the day its due you can still fall into default, pay these amounts a few days in advance to ensure the money is there on the day it’s due.

Get advice

So many people will struggle for months or even years with their finances and never get professional advice. There are over one thousand CCJ’s issued each and every day and had those people had the professional assistance with their debt, the CCJ’s would never have been issued.

No one likes to admit that they are in financial trouble, but at the same time finances can leave you stressed and give you plenty of sleepless nights. Using a professional and knowledgeable company such as Madison Financial, can help you manage your finances effectively, reduce your debts and reduce the risk of your items being repossessed, which is a situation no one wants to find themselves in.

Image credit: ZeNahla

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