Reduce debt to reduce stress: Debt reduction checklist
Money worries can weigh you down and make you feel ill.
A 2013 survey by charity debt counsellors Christians Against Poverty found that 42% of those seeking debt help had been prescribed medication by their GP to help them cope.
Use this checklist to help you curb your expenses and get in better financial health.
- Cut up your credit cards. If you want to keep one, leave it at home.
- Organise your financial records. Figure out how much you owe and to whom.
- Budget by tracking what you spend this month and looking for unnecessary expenses you can cut next month.
- Pay bills on time to avoid late charges.
- Target debts that have the highest interest rates and fees. Pay them off first.
- Pay credit card balances in full if you can. Next best thing: make more than the minimum payment.
- Ask for a pay rise, offer to work overtime, or look for a second job. Use any extra income to lower debt.
- Take unwanted stuff to a car boot sale or sell items you don't need online. Use whatever you make to pay bills.
- If you're tempted by internet shopping or TV shopping channels, use parental controls to deny yourself access to them.
- Start an emergency fund. Use that instead of a credit card for unexpected expenses.
- Create a barter system. Swap items and services with friends and neighbours to cut expenses.
- Look for low-cost entertainment: parks, movies from the library, picnics, instead of restaurant dinners.
- Talk with your family. Get everyone onside with your debt-reduction plan.
- Contact your creditors. Ask about negotiating a payment plan.
- Consolidate higher-interest credit card balances to one with a lower interest rate.
- If you live in England and regularly pay for prescriptions, consider buying a prescription prepayment certificate (PPC). In general if you pay for more than 12 prescription items a year a PPC will save you money and you can pay for it over 10 months by direct debit. Prescriptions are free in Wales, Northern Ireland and Scotland.
- Keep your eyes on the future prize! Paying off bills may not be fun now, but it will improve your life and help you achieve goals long term.