Restoring Balance To Your Bank: Dealing with Debt

Finding yourself drowning in a sea of debt can seem like an inescapable situation, but there are ways to claw your way out, so long as you keep a level head. Here are a few ways to deal with debt and get back on top of your finances.  

Consider a debt consolidation loan. Serious debt is more often the result of lots of different loans going out at different times, some of which become hard to keep on top of. These loans could include personal loans, car loans, mortgages, student loans and credit card bills. You can get on top of all these by taking out one massive loan to pay all these off. This focuses all your debts into one place so that can easily keep track of payments. Sites such as can help you shop around for the best consolidation loan for you.

Seek legal help. In some cases, you may able to wipe the slate clean or cut back certain debts by seeking legal help. Sites such as give information on such services that could prove useful if you are being harassed by constant phone calls or eviction threats. Various circumstances such as a death or divorce could lead to a loss of income, as well as various emergency payments – something which could make a court sympathetic and allow you to have your debts cleared.

Make cutbacks. If taking out another loan or seeking legal action isn’t an option for you, you can still gradually climb your way out of debt by stripping back on luxuries and living more frugally. This could involve using the car less often, limiting heating and electricity to cut down energy bills or cutting down on branded foods and using leftovers. More drastic cuts could involve downsizing property or selling your car. This site has examples of other ways you could cut back on expenses.

Organize your bills. If you’re constantly owing money to utility companies or missing rent, ensure that you pay bills on time by marking these in a diary or calendar. Set up a direct debit to a separate account which you and any other people who you’re living with can contribute money on a monthly basis. This can cover bills such as utilities, internet, TV license council tax and rent. Ensure that there is always enough money in these accounts to pay off such bills and you’ll never miss a payment again.

Budget your weekly spending. To stop you from overspending, it may be beneficial to budget each week. This could include food and drink, toiletries, travel and any other necessary expenses. Give yourself an allocated amount of money per week to use on leisure activities. For expensive days out or big events, you may be able to save up your leisure money over a period of weeks to pay for these. Make sure that you don’t go over your weekly budget – if you do, deduct it from the next week’s budget to make up for it. This way you will always have enough money to cover payments.

Photo by LDprod | Shutterstock

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