Managing money is difficult at the best of times. When things are tight, it’s easy to make the wrong choices – particularly those that favour short-term benefits over long-term stability. Preventing personal finances from spiralling out of control requires a conscious effort to take stock of the situation and take appropriate action.
Seek help
There’s no shame in being in debt. More than 140,000 people were declared insolvent during 2010 and the figures look set to continue to rise until 2012. Seeking outside assistance is one of the best ways to take an objective view of money problems. Non-profit-making organizations such as the Citizens Advice Bureau offer impartial advice and decades of experience helping people escape from debt.
Switch suppliers
Literally hundreds of pounds can be saved by changing your household’s supplier of water, electricity, gas, phone and internet. Companies are desperate for new customers and offer a number of deals and incentives for new customers. Price comparison sites can help point you in the right direction.
Debt owed to credit card companies can be shifted to other card companies. Like the utility suppliers, card companies want new customers and are typically willing to offer people a year of no interest on balance transfers.
Organise outgoings
Set up direct debits to make regular payments for as many things as possible. Organise them so that they are taken from the bank account near payday. This ensures that things like credit card repayments are paid immediately.
Repairing poor credit ratings
Those who have struggled with debt in the past may have damaged their credit score in the process. While store cards (with their incredibly high interest rates) should be left well alone, credit cards - provided they are managed properly - can be useful in proving an ability to repay debt on time.
People should also make sure that the files held by the major credit reference agencies contain no errors. The main three to check are: Equifax, Experian and Callcredit. Any mistakes can be corrected by contacting the relevant agency. It is also essential that people appear on the electoral roll so their addresses can be verified.
Managing the future
Once you manage to get free of debt, the world becomes a sunnier place. But don’t be fooled – it will only remain so with careful financial planning. Use any spare cash sensibly and consider saving or investing some of it. Investments can be protected with products such as www.sungard.com/apt that are specifically designed to assist with risk budgeting.