Tackling your debts

How to manage your debts

Posted 17 August 2012

Find out which debt solution is right for you

Get started

Answer a few simple questions

See if you are suitable

Understand your next steps

Here are a few tips to help you manage your debts.

Whether you're still in control or you're struggling, you might be wondering how to make your debts easier to manage. Here are a few tips that could help you.

Know your debts

To stay on top of your debts, it's important to know how much you owe, who you owe it to, and how much you need to pay each month. It can also be very helpful to know the rates of interest too - so you'll know which debts will grow the fastest. If you don't know how much you owe, contact your lenders and ask.

Know how much you can afford

If you know how much money you have left over each month after you've taken care of your essential costs, you can see how much you can afford to pay towards your debts. If you don't know how to draw up a budget, or you need some help, click here for a budgeting guide.

Pay your bills on time

If you miss any payments you may have to pay late fees - and if you do it repeatedly your credit rating could be damaged. If it helps you, draw up a calendar that says which payment is due on which day - and how much you have to pay.

Try to pay more than the minimum payments

Your lenders will expect you to keep making the minimum payments each month, and if you don't you might end up sliding further into debt. If you can afford to pay more than the minimum payment, however, it's recommended that you do so. It would mean that your debts are paid off quicker - and you'll pay less in interest in the long run.

Which debts should you pay first?

That depends on how motivated you are to pay them. If you're good at motivating yourself to pay your debts - or even overpay them - it's usually sensible to focus the debts with the highest interest rates first, as this will cost you less in the long run.

Some people, however, find it hard to keep chipping away at several debts at once without seeing any tangible 'results'. That's why some people prefer the debt snowball method, where the smallest debt is repaid first. When a whole debt is cleared, it can give you a great sense of satisfaction - encouraging you to continue repaying your debts.

Do you need professional debt help?

Sometimes, no matter how hard you try, it's just impossible to clear your debts on your own. In this case, there is help available. If you're a resident of Scotland and you're struggling with your repayments, you might be able to find a debt solution that could help you here.

If you'd prefer to speak to an expert, click here to fill out the form on this page and somebody will be in touch to discuss your options.

by Shelley Bowers

Back to blog home

Did you find this useful? Share it with others!

To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.