Useful Tips That Will Help You Stay Out Of Debt

Finances are one of the most important things to consider in our lives, yet there are many people who are either irresponsible with their money, or who simply don’t understand how to manage it in a way that would work for them. Debt is a reason for a lot of stress for many people, but the good news is that there are ways in which you can avoid getting into debt – and if you do happen to be in debt at the moment, there are ways that you can get out of it, and get your life back on track. The tips in this article should help you to keep your finances in check, meaning that you won’t have anything to worry about.

Live within your means

We all have a lifestyle that we can afford, and ideally it would consist mainly of essentials, with one or two luxuries as treats along the way. People often get into debt because they cannot get the balance right between how much they earn and how much they spend, and as a result of this they may spend on credit cards or store cards, which is a debt that will rise with interest.

There are some reasons that you might want to get a credit card, as regular repayments can improve your credit rating, and they could be good to use for a large, unexpected purchase that you had not planned for in this month’s pay packet. However, credit cards should be for emergency use only, and where possible they should be paid back in full every single month. Credit card companies often increase limits automatically, meaning that you have the potential of spending a lot of money that you don’t have to spare.

Avoid high interest loans

High interest loans, or “payday loans” are designed to help people who need a little money to help them until they are paid. While this may be a reasonable and accessible option for some, as things can happen that we do not expect, there are many who use this as a regular way to get hold of some fast cash, and as a result they have to pay huge amounts of interest. If you have an unexpected payment that you have to make, it is always better to explore other avenues before you take out a loan like this.

Research essential loans

If you need to borrow money – for example for a car or a mortgage – you should never take the first deal that you are offered. The amount that you pay for your loan overall can vary hugely with regards to interest rates and lengths of repayment, so you need to do the maths and see exactly how much money you would be paying at the end of the term. Doing so would mean that you wouldn’t spend money unnecessarily.

If you are already in debt

If you find yourself in debt already, then don’t panic, as there are ways that you can get out of it. Debt does not have to be forever. The first thing to do is to see whether your debts can be consolidated, so that you only owe one creditor at one rate of interest. This is much easier to keep track of, and could mean that you are paying less at the end of the loan term if some of your previous creditors had been charging a higher rate of interest.

Sometimes debt consolidation isn’t enough, and at this point there is the option of an Individual Voluntary Arrangement if you’re in the UK (England and Wales), or a Trust Deed Scotland if you’re in Scotland. These options are open to you if you have £10,000 of debt for a trust deed or £12,000 for an IVA. If you choose to go down this road, you will freeze your debts, and pay one monthly amount that you can afford over either 4 (trust deed) or 5 (IVA) years. At the end of the agreed term, if there is anything that you haven’t been able to pay, the debt will be written off completely.

There are many ways to avoid getting into debt, but equally there are ways in which you can solve the issue if debt should take you by surprise. By being proactive and taking care of the situation, you can ensure that the issue doesn’t get even worse than it already is – so being organized with your finances is well worth the effort.

4 Ways to Increase Your Income

Do you ever feel like your income just isn’t enough? What if I told you there were at least four other ways for you to earn a larger income than you do now? It most certainly is possible. Sure, it might take a little bit of effort on your part, but it is definitely possible and could severely improve your quality of life!

  1. Work Hard for that Promotion

    This definitely isn’t the quick fix for your financial woes, but it is a great long-term solution. Put in the extra hours, show your boss that you are more valuable that your current job title implies, and you might soon find yourself in a new office with a larger paycheck each week.

  2. Start a Side Business

    Almost everyone has a full-time job, which takes up 8 or 9 hours of their day, but what do they do with the other 7 hours of their life? If you asked them, they would have no idea. Half of that probably gets wasted watching TV, when instead they could be earning an additional income through a side business. Your business could be as simple as mowing lawns, or it could be more complex and web related. If your skills are marketable, consider starting a side business in addition to your full-time job.

  3. Pursue that Settlement

    If you have been injured in the past and have a chance at earning an annuity, now might be the time to pursue that. These structured settlements often pay out monthly wages and can be a great second income. Alternatively, you can sell it and get a lump sum now. So, if you have a chance at landing yourself a settlement, it would be a fabulous addition to your current meager earnings.

  4. Try Crowd Funding

    There are many start-up businesses that crowd source, which simply means they gather money from the public for an idea of theirs. If you have an idea, you could do this and then use the money to put your idea in production (which would then earn you that monthly income you desired). It might not be an immediate addition to your monthly earnings, but it could be a very large addition later on down the road.

Have you been able to add to your meager income? How did you do it?

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