How to Avoid Debt in UK? Get Free Debt Advice

Posted by Citizen Debt Help on February 12th, 2021

How to Avoid Unaffordable Debts in United Kingdom?

The United Kingdom has one of the biggest problems of debt in the world. One in three people is facing some kind of debt problem. Credit Cards, Car Loans, Overdrafts, Education loan and Personal loan are some the instruments because of which people face debt.

If you are getting stuck in the vicious cycle of debt, it is very difficult to get out of it. Prevention is always better than cure and the same applies to debt. It is always better to avoid debt than getting in debt and replaying it.

We have formulated some steps and tips so that one can avoid unaffordable debt in an effective manner...

Analyse your situation and check where you are standing

The very first step is to check where you stand and are you in debt crisis or not. For this, you have to make a list of your expenditure which will include credit card, mortgage, rent, bills, etc. 

What you need to find is how much you owe, how much are you paying and how much are you struggling to pay?

If you are struggling to pay the amount, it’s a signal to reduce your expenses which are not necessary.

Make a budget

Making a budget will help in finding out where are your expenses at and then you can cut them down if any expense is not required. Effective expenditure is key.

Savings

Many people don’t have a habit of savings. By following the steps above you will be left with an acceptable amount of money. This money can be turned into your savings.

Savings can help you in boosting your repayments if you have any and can also act as an emergency fund for your needs.

Extra Income

An alternate option to cutting down expenses is having an extra income. Many other sources of income are available these days which not only provide good income but are also easy to manage as they have flexible working hours.

Credit Score

Always maintain a good credit score as it is important for your financial health. If your credit score is low there are many ways to improve it. You can also rectify the mistakes in your credit score if there are any.

Mental Health

In the UK, one of every four people is facing mental health problems. This can create a hindrance in your capacity to think clearly. So if you have any kind of issues related to your mental health, get rid of it immediately.

Taxes

People pay many kinds of taxes each year. You need to be aware of the taxes falling in your lap. Some of the taxes can be overpaid so you need to check them. Many times various deductions can be done on taxes which are very important to apply as they will save your money.

Benefits and Allowances

The government provides various benefits to its people. You have to check the available benefits and claim them which will help you meet your daily needs and in return increase your savings.

The marriage allowance is provided by the government to married couples. Many couples don’t apply for it.

You can use food banks. They can be your emergency food supply.

Energy providers provide grants to their low-income customers. So if you are struggling with energy bills, contact your energy provider.

Working Tax Credits and Child Tax Credits should be claimed if you are qualified for any of them.

Pension Credit is also provided which is based on your income.

Child Benefits is one of the important benefits provided by the government. If you qualify for it, you can get more than £1,000 a year for your first child.

Important sources of debt to be paid attention

Credit Cards – Pay more than the minimum payment each month. If you are paying only the minimum payment then it will take longer to pay back the full amount of what you owe. You should also reject any increase in your APR. If it’s possible for you, try switching to a 0% balance transfer credit card.

Overdraft – Always try to go for an authorized overdraft. Speak to your bank for permission to go for an overdraft. Unauthorized overdraft attracts unnecessary extra charges and can be expensive.

Mortgage – There are many options available for mortgages. You should decide and go for the cheaper one as it will save money in the long run. Also if your eligible, try getting mortgage interest support.

If you need more detailed info regarding debt management plan, must connect with Citizen Debt Help today and become debt-free today