5 steps to cope with debt
If you're having problems with debt, it helps a little to know that you're not alone.
With high unemployment, there are millions of Brits wondering how to manage their bills, let alone enjoy a few extras like a trip to the cinema.
Here are five steps to coping with your debt:
1. Make a budget and stick to it. This may be the hardest step of all, because this is where the problem is laid bare. Knowing how much money comes in and how much goes out is the first step to getting a handle on debt. You must realize that sticking to a budget can be like sticking to a diet: you endure serious deprivation until you can't take it anymore and then blow it all with one trip to the store. Therefore, you should include a few, selected, "carrots" in your budget (fancy coffee once a week, getting your hair done, etc.) to help you deal with the enormous "stick" of ongoing, severe financial problems.
2. Be honest about "needs" and"wants." Again, it's a matter of personal honesty and also knowing which of your particular wants can be reasonably incorporated into your budget. For example, buying a new car is probably unreasonable, but buying a new pair of trainers so you can walk in the park regularly is probably reasonable.
3. Get out of debt and get help doing so. I know what you're thinking: "Oh, get out of debt! Of course! Why didn't I think of that? Ninny." But it's the huge elephant in the middle of the room that nobody wants to talk about. I'm not talking about borrowing from friends and family. The perils of that situation deserve their own post. But once you know the ugly truth about how much you owe and how much you have coming in, then you'll have the figures you need to take to legitimate debt help services like the National Debtline. They can help talk you down from the crisis and find someone to help you, and perhaps most importantly of all, will help you stay clear of the the vulture "debt counselors" who scam people who are in serious financial straits.
4. Rethink your attitude toward money. It is extremely hard to have a positive attitude when every day's mail brings yet another angry creditor demanding payment. But you have to do it. For some people, rather ironically, giving away small amounts of money changes their attitude. Knowing that you gave a few quid to the Salvation Army or the RSPCA often has a profoundly positive effect on attitude. Sure, money is important, but you need to know that you can control it, rather than the other way around.
5. Persist. There is no substitute for this when it comes to getting out of debt. Once you start making progress, however, you'll be more motivated to stick with it long enough to get your finances back in order. And on that special day when you finally pay off that last creditor, have a cake, or a glass of champagne, knowing that you had a mountain of debt, and that through hard work you conquered it.
Cumulative financial stress does take its toll on the body, and the longer you put off dealing directly with your finances, the longer that stress will continue to take its toll on your mental and physical health and perhaps on your relationships as well. So while the steps themselves can be quite stressful, the upfront investment in some unpleasantness can prevent much more of it in the future.