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I can't pay the bills!
I can't pay the bills! It's something you hear a lot - especially at times like this, when all the financial news seems to be bad news. Unemployment's high, pay rises are low or non-existent, and the bills just seem to keep on getting higher.
You might have read some stories in the papers celebrating the fact that inflation fell to 3.6% in January, but that's still nearly twice as high as the target set by the Chancellor, and it still means prices are rising a lot faster than most salaries are. So it's no wonder so many households are struggling to pay their bills.
What can I do?
It's also no wonder that the answer to this question will be different depending on who's asking it. But one thing that can help just about anyone is figuring out a budget. Once you've got the figures down (what you're earning & what you're spending), it should be a fair bit easier to figure out a few ways of improving your finances.
It could encourage you to look around for a cheaper gas / utility deal, for example, or it could make you think more carefully about your 'discretionary spending' - spending on things you don't really need.
In a nutshell, if you're struggling and can't afford your bills, you need to find ways of increasing your income or cutting back on your spending - and getting your budget down on paper (or on a PC) is a great way to do that.
So how does debt management fit in?
So how does debt management fit in? If you're in a 'can't pay the bills' situation, it could be that no amount of cutting back is going to be enough to make everything affordable again.
These days, one major expense that many households are struggling with is the cost of repaying unsecured debts, from credit cards and store cards to unsecured loans. If that sounds familiar to you, there could be a way of bringing that cost down every month.
What debt management basically involves is talking to your unsecured lenders and asking if they'll accept lower payments every month, since you can't make the payments you originally agreed to make. They don't have to agree to that, so it's down to whether they think this is the best way for you to get the money you owe them repaid.
If they do agree, you'd make those lower payments until the debts are all paid off - or until your financial situation improves and that means you can afford your original payments again.
Making smaller payments can affect your credit rating, but that's something that might have happened anyway, since you just can't afford all your bills. It can also cost you more in the long run, since interest will have longer to accumulate - although lenders will often agree to freeze interest and charges while someone's on a debt management plan (again, they don't have to).
If you'd like to know more about debt management, just fill in the 'Request a callback' form on this page or call Debt Advisory Centre on 0800 970 7724.
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