Debt Advice - Short term problems

Everyone suffers from short term problems at some time in their life. Here are some actions you can take which can help speed up the time it takes to get your financial fortunes back to normal:

• Draw up a simple monthly budget and try to stick to it.
• Move to cheaper lenders. Most people have a wallet or purse full of cards that they’ve had for many years. Your credit score tends to get better as you grow older, so you probably qualify for cheaper interest rates by now. Store cards can be really expensive. On average, people who spring clean their finances using our free Find a Lender service to find the cheapest cards matched to their current credit standing save £400 per year. Go for 0% introductory deals to save even more and always remember to close your expensive card accounts to avoid the temptation of using them in future.
• Switch to a cheaper utility company. It only takes about 20 minutes and typically will save £200 per year.
• Ask your bank for a list of all standing orders and direct debits. Go through it and cancel anything you don’t really need.
• Sell any unwanted items on eBay.
• If you have taken payment protection insurance on any of your loans, cancel it. You’ll be surprised by the reduction in monthly payments. It’s a rip off.
• Arrange to pay the minimum payment on all your credit cards by direct debit, and then pay more if you can afford it using the tear off slip. That way, you’ll keep your credit rating intact.
• Make sure you are claiming all the benefits you are entitled to.
• Claim back any bank charges you may have suffered. Click here to find out how to do this.
• If you have a mortgage, think about remortgaging, preferably without increasing the debt, to a new mortgage lender that offers an introductory cheap rate. Do your sums carefully. Click here for a multi-award winning Independent Financial Advisor we have vetted and recommend.
• Think about selling any shares you may have, any premium bonds and changing any foreign currency you may have. The proceeds are better off used in reducing your debt than they are in a drawer.
• If you have a car with a loan outstanding against it, check whether you could be better off selling it, repaying the loan (check for any early repayment penalties first) and leasing a new one to reduce your costs of motoring. A small car can be leased for just over £110 per month which will cover your road tax, breakdown cover and provide a warranty against breakdown. Pick the right one and you could save money on fuel too.

If you’ve tried all this and you are still worried, try our suggestions on Debt indigestion