By the end of 2017, people in the UK owed a total of £1.572 trillion in national debt. This means an average adult in the United Kingdom owes over £30,386 in debt, 114 percent of the average earnings of an individual in the country. Consumer debt per household has also risen by £516 to £7,616. With some many households dealing with debt, many of them are looking to repay the money as early and easily as possible. Improperly managed debt can have an effect on your credit score and report among other aspects of your life.
However, even with the best intentions and goals, sticking to your debt repayment plan can be tough at times. It can be quite easy to become overwhelmed and go off track. Considering the average debt owed and interest rates charged, many people spend years repaying their debts. It definitely is a long term commitment. The key to this is remaining dedicated to your goals. If you are looking for a few tips to keep you focused, read on.
Make A Plan
The first tip is a simple one: make a plan. This refers to an actual written debt repayment and budget plan and not just an overview in your mind. Taking a few minutes to look at your expenses and work out a budget can help tremendously in remaining motivating and on track towards your debt repayment goal. This also involves doing appropriate research on your intended strategy and the tools you are looking to employ in repaying your debt. If you looking at the option of consolidation of debts, take the time to research the best offers available from lenders. There are many loans available to rebuild your credit and manage existing debts. By making a simple repayment chart, subtracting amounts as you repay and also attaching a goal date you can hold yourself accountable and track progress.
Another thing you can do it is to share your plan with someone to keep you accountable. If you find that you tend to struggle with sticking to limiting spending habits or staying on track, share with a friend or family member. Many people join communities or friends with similar goals and they have a source of motivation and great information throughout the debt journey. Finally, be sure to place your plan that is visually accessible often as a remainder of what you’re striving towards.
Make It Realistic
It is a natural expectation to want to repay your debts as soon as possible. However, when setting out your debt repayment plan, take into account all your expenses and be realistic with your goal payments each month. There is no point in creating a debt plan to repay £10,000 of debt in one year if you can only manage to spare an extra £200 per month towards your goal. When creating your plan, take into account all of your current income and expenses and be sure to leave a bit of room for adjustments such as changes in financial situations. If you are a parent, this step is very more important. Unforeseen expenses can happen and make a difference in your goal savings for that month. So when thinking of the amount you can pay off each month, go with a standard amount you can guarantee each month. Of course for those months where your budgeting goes favourably, you can add in the extra to your standard amount and reduce your repayment time.
Make It Automatic
Finally, another great tip to keep yourself on track towards your repayment goals is to automate your repayments. It can be as simple as creating a separate savings account dedicated to debt repayments or setting up direct debits to make your repayments each month. This way it is automatically taken at a date of your choosing from your monthly salary.
There are also many great apps designed for mobile phones that you can set payment reminders. In addition to budgeting apps, they are great if you need an extra motivation and helping you focus on sticking to your budget. It may seem like a long and tiresome journey but keep in mind, the purpose of starting your journey and focus on the end, picturing in your mind what your life can be without the added debt repayments each month.