How To Stabilise Your Finances When In Debt

If you don’t manage your debts, you can be sure they will manage you. The Office for Budget Responsibility (OBR) estimates that households will spend £58 billion more than they earn this year, rising to about £68 billion by the end of the decade.

The key to ensuring that this does not escalate and become a bigger issue is to take stock of your accounts, stabilise your finances and establish control of the situation. Here are some tips on how to be able to do just that:


The first thing you need to do is make sure you are aware of every penny that comes in and out of your account. Go through your last three or four account statements with a fine tooth comb so that you know how much your regular bills cost – including any that come out quarterly. Sites such as Money Dashboard can help you to pull all this information together if you’re struggling.

Cut excess

When you’re going through your accounts you’ll need to make note of any unnecessary expenses that you can cut out. Foregoing the odd coffee, pint of beer or impulse purchase can avoid things getting any tighter. Think, also, about whether or not you can shop around to save money on your bills by using price comparison websites. The Government reckons many households could save about £200 by switching their energy supplier.

Save what you can, no matter how small

You need to pay off your debt, yes, but you do also need to ensure that you are able to meet any unforeseen costs you may face, such as car repairs. Try to save something every month, even if it is a really small amount. It’s a great habit to get into and will develop a ‘rainy day’ pot to use in emergencies. This will ensure your finances aren’t destabilised by an out-of-the-blue bill.

Direct debits

If any bills aren’t paid by direct debit, then set this up. Many providers offer a small discount for this but the main benefit is that you can guarantee that you will make the payment and the date on which the money will come out. Getting your house in order is a key part of running a stable ship.

Consolidate debt

Life can be confusing – and pretty stressful – if you’ve got a number of different debts in different places. Credit cards, loans, overdrafts and more can easily become a real headache. In this instance, debt consolidation can be a big help – helping you to wipe out a long list of different debts and transform them into one, clear payment. They don’t all have to be different types of debt either. People who have splashed out ‘on the plastic’ may be able to benefit from credit card debt consolidation.

If you know exactly what you spend every month, cut down on your outgoings, plan your spending properly, save and consolidate your debts and you’ll benefit from having a sensible and stable financial footing.

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