Debt can feel overwhelming - especially when it starts impacting your daily life. Whether it’s credit cards, overdrafts, loans or missed utility bills, debt isn’t just a financial issue – it’s emotional too. But you’re not alone and there are steps you can take to regain control of your finances.
Whilst you might feel stressed and overwhelmed, it’s important to take a big breath and step back from the situation. Clarity is really important. Start by writing down everything you owe – who you owe, how much and what the interest rates are. If you’ve got any missed payment penalties, include those in the list. It might feel daunting when you see the finished list but it’s the first step to rectifying the situation.
As we explain under A realistic budget helps you to understand what you can afford to pay towards your debts. It’s really important to be honest with yourself about your expenses so that you’re able to stick to your budget. Start by listing your essential expenses like rent, food and utilities. Subtract your income from this – you’ll be left with your disposable income. This is what can be used to tackle your debt.
Not all debts are equal so you need to identify which debts you’ll tackle first. Prioritise debts like rent, council tax and energy bills as these have the most serious consequences if left unpaid. You don’t want to be dealing with court fines on top of everything else. Next in line are the high interest debts like credit cards and pay day loans – the interest can compound quickly and you’ll end up paying a lot more over time. Once you’ve covered essential spending and prioritised your debts, you can start chipping away at the rest.
Have a look at your budget and think about if there are areas where you could As we explain under reduce your spending. Perhaps you could cut back on takeaways or cancel any unused subscriptions. Even small savings could be redirected to paying off debt faster.
If you’re struggling to make payments, don’t just ignore the problem as things will only get worse. Reach out to your creditors as many are willing to help if you explain your situation. They might be able to agree a repayment plan that is achievable for you. They might even be able to freeze interest or delay payments temporarily but if you don’t ask, you won’t get! Being proactive shows you’re taking responsibility rather than burying your head in the sand.
There are two popular methods for paying off multiple debts:
Snowball Method – Pay off the smallest debt first, then move on to the next. This helps build momentum and helps you to stay motivated.
Avalanche Method – Focus on the debt with the highest interest rate and pay that off first – this will save you more money in the long run.
Being in debt can feel lonely but you don’t have to face it alone. In the UK, there are several organisations who offer free, confidential debt advice:
They can help you understand your debt and develop a strategy for tackling it. They can support you in negotiating with creditors and set up formal debt solutions.
Paying off debt takes time but every payment is a step towards being debt-free. Track your progress, celebrate the small wins and make sure you revisit your budget regularly. If your income changes, adjust your plan but just keep going.
Struggling with debt can feel isolating but help is available and it is possible to become debt-free. With a clear plan, clarity and determination to succeed, you can take back control of your finances and start building a more secure future.