We are currently going through difficult times where most people are struggling with their financial situation. Ever since Covid-19 and now the war in Ukraine, it has had a massive impact on the economy.
For some people, it cannot be avoided. That could be due to them buying a car or a home. However, there are many other debts which are considered bad debts. That can put an individual under f financial stress, causing them to struggle mentally. If you are someone who is under a lot of pressure due to the debt hanging over your head, there are a few things you can do to help reduce your debt.
Make A List Of The Things and People You Owe
One of the first things you should do is create a spreadsheet of the people you owe money to. That will make things easier when you see it all in one place. Include credit card debt, personal loans, student loans, mortgages and everything else you owe.
Once you have put all your debts on a spreadsheet, you must put down the essential information. That includes interest rates, monthly payments, when you have to pay it back, how much and anything else you can think of.
It will put your mind at ease because you know how much you need to pay and when you need to pay.
Work Out How Much You Can Pay Back Each Month
Once you have written down what you owe, you must work out how much you need to pay back. Work out how much money will leave your bank once you get your wage. That includes monthly subscriptions, bills, food costs and anything else you need to buy each month.
Your next step will be to look at how much money you have left over. Put some of this money away so you can gradually get yourself out of financial trouble. If you don’t have enough money left over, you need to look at ways to increase your income so you can pay off your debt however, that is easier said than done. Look at other ways where you can reduce your expenses each month to help pay your debts.
Get A Debt Repayment Strategy In Place
You have now written down all of your debts. You have looked at your expenses and how much money you have left over. You have noticed you don’t have too much money left so you have to look at a debt repayment plan.
Using an IVA calculator is one way you can see how much you can reduce your debt. You will also be repaying less money each month which will make it more doable. All you have to do is speak to your advisor and be completely honest with them. You need to say how much money you think you are capable of paying and take everything into account. That includes your spending habits and where a lot of your money goes. The IVA Advisor will give you the best advice possible to ensure you can pay off your debts without worrying about money.