Monday, January 28, 2019

How To Get Your Family Out of Debt - Even On A Low Income ♥


For families, debt can be one of the most devastating things they can go through.

Anything related to money can be stressful, even if you're doing okay, so when you find yourself in debt it can really take it's toll, and not just on your financial matters either, but on your family unit, mental and physical health and the joy of life in general.

Being a parent in debt can really make you feel as though you're failing your children and this guilt and feeling of failure is something that no parent should have to put upon themselves.

All hope is not lost though - even if it feels like it really is, there are ways in which you can help yourself get out of debt simply by changing your habits and by reaching out for help from trusted sources.

Hopefully this guide will be helpful to those struggling with debt and all things money matters at the moment. There is a solution, so please don't feel like you're alone.

1. Enquire as to whether you're eligible for a Debt Arrangement Scheme
The Debt Arrangement Scheme is a statutory debt management scheme that was introduced in 2004 to help individuals repay their debts.

Under DAS you can apply for a Debt Payment Programme (DPP) that allows you to pay off your debts free from interest, fees and charges over an extended period. This ensures that payments are set at a realistic level (this is very much needed when you have a family to support) while giving you protection against any legal action from creditors and safeguarding your assets - including your home (this is ideal as losing your home is one of the most worrying things for families in debt).

2. Change your daily habits
This can be one of the hardest things to change and get used to as your try to get yourself out of debt. Unfortunately, trying to pay off debts can lead you to no longer be able to enjoy a little luxury during the day, such as a cup of coffee from the coffee shop or buying your lunch out, etc.

It's amazing though how the funds can accumulate when you give these things up - funds which can go towards paying off your debts and getting back to an even keel once again.

3. Budget
Having a weekly budget is such an important thing when you're trying to pay off debts and establish how much you can afford to set aside weekly in order to pay them off.

I would recommend having a set notebook or spreadsheet that lists all your incomings and outgoings in a particular week and adding and subtracting everything up to find out how much you can manage to put away every week.

By sticking to your budget you won't be accumulating anymore unnecessary debt and it can help to keep you on track to getting debt-free once again.

4. Sell any items you don't need
I say 'items you don't need' as I don't want anyone going out and selling their TV, etc. just to pay off their debts - hopefully things never get that bad. Instead, I mean selling things such as baby items you no longer need, old clothes, etc. to gain some extra funds.

Last January I shared how I made £100 in 1 month just by selling some of my sons' old baby clothes and have done the same again this January. It's just a small bit of effort to sell stuff you don't need and not only are you earning some extra cash to pay off your debts, you're also freeing up some space in your home.

5. Check that you're getting the best deals on your outgoings
Some of us are guilty of staying with suppliers such as electricity, gas, etc. just because it's easier to stick with these providers - but are we really getting the best deal possible?

By comparing prices of all the various suppliers, you could be reducing your bills, etc. and freeing up more money from your outgoings to put towards paying off your debt.

It's so important to shop around and make sure you're getting the best deal possible for these necessities and not over-paying for the exact same service.

6. Change the way you shop
If you do need to buy things think about how you're buying them. Do the products you're buying have to brand new? Can you avail of the second-hand or even free?

There are many ways to shop for things cheaper - look in charity shops or thrift stores (I also love car boot sales), look in local Facebook selling groups (I see a lot of items going for free on these) or simply wait for a sale.

I would also use promo codes if you simply have to get something brand new so that you're still saving money on your purchase. 

7. Make sure it does happen again
Once you find yourself debt-free it's so important to put things into practice that mean you will never find yourself in the same situation again.

This means that you make sure to leave below your means, only spending what you can afford each week and saving for a 'rainy day fund' if possible so that if you do have an unexpected expense there is money there to pay for it outright, instead of having to borrow, etc.

It's important to stay away from pay day lenders who change extortionate rates and to manage your finances correctly in order to avoid falling into debt ever again.

Hopefully these tips have been helpful to any families who find themselves in debt. It can be quite a daunting and anxious situation to find yourself in, but there is trustful help available and there really is a way out - you just have to try.

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