How to Make a Start on Paying Back Debt

If you are in debt, then you may really wish that you could start to pay it back. However, if you have a lot it can be really daunting or you may feel that you just do not have enough spare money to start paying it back. There are ways that you will be able to do it though.

You will need to start by finding out all of the debt that you have and seeing where it all is. This can be the most difficult part as you may not want to think about this and look into paying it back. However, it will be a really big step forward if you can do it. You do not even have to add it all up if you do not want to, just put together a list of the places that you owe money to. The next step is to find out how much you owe to each and find out how much you are paying in fees, charges and interest. It is worth choosing whether you want to repay the smallest one first, which could feel good as you will start illuminating those debts right away or whether you would rather pay off the most expensive one, which will be the most cost effective method.

Look at the means of borrowing that you have used and investigate whether it would be cheaper for you to use some other method. For example if you owe money on payday loans, logbook loans or overdrafts, then these are likely to be very expensive. It could be better to get a loan to pay them off, if you can get one, but make sure that you compare the costs and the interest rates including the overall cost.

If you have some savings then use these to pay off some of the money owed. You may not like to be without savings, but it is far cheaper to pay off the loan and then borrow more should you need it, rather than having money to fall back on earning no interest in a savings account while you are paying fees and interest for having loans.

Next you need to stop buying more than you can afford. This is also something that will not be easy, but if you can reduce your spending then you will not accumulate more debt. Hopefully you will be able to reduce it so much you will have spare money to pay off some of the debts. Think about every purchase really carefully and decide whether you can afford it or not and whether it is necessary. Think about the money that you could save if you do not buy that item and how much more quickly those debts will be gone. This may seem pretty annoying, but you will get used to it and as the debt reduces it will feel good to spend less and repay them. It is also worth seeing if you can reduce your regular bills such as phone, electricity, rent etc by moving to somewhere cheaper, reducing your usage or switching provider. There are a lot of small changes that can be made that will make a big difference.

You may be able to earn more money as well which could help. Getting a better paid job, a pay rise, an evening or weekend job, starting a business, selling things will all help to increase your income and give you more money available to pay back your debts with. It may not be easy to do these things or to find the time, but every small thing that you do will help you work towards paying off the debt, taking lots of small steps will all add up. Even if you just make a little change each month that results in you paying out less or earning more you will be closer to paying off the debt.

It is wise to make sure that people around you know that you are paying off debts as well. You may not want to tell everyone that you have debts but you could always just say that you are trying to save money, which effectively you are as you want extra to pay the debt. This will mean that they should not put so much pressure on you to spend money when you are with them, perhaps on nights out or meals or things like that. If there are some that you can trust you can explain all of the details and hopefully they will be able to support you and they might even have some ideas to help you. Of course, you may rather keep it to yourself and that is fine too, you need to do what is right for you.

The more steps that you take towards paying back your debt, the easier it will be. You will start to reduce it slowly but the more that you work at it, the quicker it will reduce as you will be paying less in fees and so will have more money available to pay back the debt.

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