5 Tips To Sort Out Your Finances

I used to be a couple and utter scatter brain when it came to money.  If I wanted something, I usually bought it, without thinking of the consequences to my bank account, or credit rating for that matter.

This lead to credit cards, loans and ended up in a situation where I could barely keep my head above the water; but my head was buried in the sand.  After getting paid one month and realising the day after that there was barely anything left, I realised that something needed to be done.

I was getting to a stage where I needed help paying bills, my credit card bill was sky high and the dollars coming in did not match what was going out.  I managed to remedy the issue and my debts over the next few years and picked up some tips along the way which I thought I would share with you today.

Find out just how bad it is

When you realise that you had gotten yourself into a situation, everything has to come out.  Find out exactly what you owe, just how many credit cards you actually have, what you are spending your money on every month.

The first thing that I did was to look over my bank statements and credit card bills for the past six months to look at what I had been buying.  I made a chart with my justifiable expenses on one side, and the extravagances on the other.  I bet that you can guess which side had more entries.

Make A Budget

Sounds basic, but when I say make a budget, I mean for everything.  Break down every cent that is coming in and list everything that has to come out and on what date.  Make a 30 day planner and write down when bills are coming out and how much for.  If you are buying your lunches, make them instead.  STOP BUYING EXPENSIVE COFFEE SHOP COFFEES!

Be honest with your credit providers

When I realised just how much I owed to my credit card providers and loan company, I started to look at debt management companies.  Many seemed to offer the same sort of service, for a fee of course, which involved going to your credit providers and negotiating a lower monthly payment and a halt on interest.  I decided to cut out the middle man and go to them direct.

I managed to get my credit card company to freeze my account and stop any more interest going on.  I was completely honest about what I could afford and made a payment plan with them which was management.  Remember, they want their money back, what they don't want is you to stop paying completely.

I managed to make a payment arrangement with all of my debtors, with varying degrees of helpfulness from them.  But it did ease the situation and enabled me to pay them back faster and without the worry of demand letters and Court judgments.

Save

If you are trying to pay off your debts, can you really save?  Yes, but start small.  I was given a large piggy bank styled as a fashion boots many years ago and decided to put it into action.  I only put the smallest denominations into the boot, pennies, cents etc whenever I had them in my purse.  It took around 6 months to fill the boot and I was presently surprised just how much it added up to.

I would like to say that I used the money to pay more off a bill, but I didn't.  I did use it to buy someone a birthday present so that still counts, right??

What I also tend to do is take advantage of discount opportunities and vouchers codes from places like Dealsdaddy and Dealsqueen.  There are always going to be things you need to buy at some point, so why not take advantage of a discount!

Sell

If you have been throwing your money around for the good few years, the chances are that you own more stuff that even thought.  Go through everything and be brutal.  Sell what you do not need or had forgotten that you had bought.  Stuff will only ever be stuff and does not enrich your life, or your bank account!

Finally, don't beat yourself up about it.  It does not help.

You got yourself into that situation and you will get yourself out.  It will take time, effort, concentration and a stranglehold on your finances for a while, but you will get there.

Fast forward a few years and my finances back in order and I am saving for the first holiday abroad in 8 years.   Time for a long awaited cocktail by the beach.  I think I have earned one.

*Collaborative piece

Managing Your Finances at Christmas

One of the things that used to be an issue for me was sticking my head in the sand when it came to finances.  Particularly at Christmas.  I used to be in debt but at Christmas, at time where I love to splurge on my loved ones, that debt went to the back of my head and I spent what I wanted..

I know that this is something that many of us do, especially in the holiday season.  When January rolls round, our head comes out of the sand and we realise yet again that we have overspent and gotten further into debt.

This happened to me.  It happens to many people.  It took me seven years to sort out my finance problems and along the way I have learned many lessons, a couple of which I will share with you.

Please note that I am not a financial expert, nor am I qualified to give financial advice.  I am writing this blog today because people do not talk about being in debt.  We gloss over the subject, we hide the problems in shame.  I was that person. In debt more than I could handle, through my own fault.

The first tip.  Do not panic.

When I (finally) took my head out of the sand I had no clue what to do, and went for the first option available which is hindsight, was the wrong thing to do. I panicked and ended up paying out far more as a result.

Once you have realised the extent of your money problems, you need to look at the different options available to you in order to resolve them.  

One of the most stupid things I did over one Christmas period was to hit the payday loans.  What I didn't think about was the huge interest rates involved and how far it can escalate.  If you get into this kind of mess what you can do is look at a payday loan consolidation company.  They look at your budget, sort out with you what you can afford and deal directly with your creditors.  Sometimes, as I found, it can all be too much so someone dealing directly with your creditors can be a huge weight off your shoulders.

Another option is a debt management plan.  

My error was that I did not research debt management plan providers and just went with the first one I found.  This ended up costing me over two thousand pounds by the end in admin charges.  

What I know now is that there are free debt management plan provides which do exactly the same job.  They work out what you can afford, negotiate with your creditors and work out a plan for you to pay off your debts, often with the interest frozen.

I would suggest contacting the Citizen's Advice Bureau who have loads of advice on the subject and the link I have put in goes directly to the free providers of debt management plans. 

If you owe more than ten thousand pounds, you could go into an IVA (Individual Voluntary Agreement).  You can get free advice on this from the Money Advice Service.  This enables you to get around 70-80% of your debts written off, and the remainder is handled by an insolvency practitioner (you will pay for this service).

I hope this helps a little for anyone reading through who has only just pulled their head out of the sand and is, as I was seven years ago, in a blind panic.  Don't panic.  Research.  Make use of the free resources available.  

You will get through this.  I did and so can you.

*Collaborative Piece