1. List your debts

In order to become debt free, you need to take a stock list of your debts. This means confirming the balances of all your over drafts, credit cards and loans, and then find out the amount of interest you’re being charged on each.

 

2. Budgeting

Use a spread sheet to itemise how much you spend a month. This will help you budget more effectively and easier. Take a Look at our budgeting apps section

 

3. Review what you spend

Once you’ve got a budget you need to stick to it. You could find more ways how you could save money, this could include; cancelling gym memberships, eating out less and even saving on gas or electricity bills. Don’t be scared to cut down on certain things, you need to be brutal with yourself. There are other ways you can cut costs, such as, saving on petrol by cycling or walking more regularly. If you save a large amount of money, it can go towards repaying your debt.

 

4. No temptation

You need to reduce your temptation to spend more money. If you’ve still got any cards you’re trying to pay off, cut them up so that you’re not tempted to spend anymore money on them. Try and reduce the amount you go shopping or just even browse around shops, this should help you be able to spend less.

 

5. Prioritize

Repay your debts starting with the most expensive. Make sure to try and repay as much as you can a month, this should help you repay the debt quicker. Still continue to pay the minimum amounts on your other debts because if you miss a month of payment it could result in a black mark on your credit score.

 

6. Effective repayment

You may also be able to save money by transferring balances from your most expensive card to your least expensive card. Try and find cards that offer a 0% balance deal, this will also help you save money, however if you’re in a lot of debt you may find that it will be more difficult to be accepted or not accepted at all.

 

7. Automatic repayments

If you’re scared of missing your payments, you can make them automatic. A standing order will let you pay a set amount on a set date each month, this will always prevent you from forgetting or missing your payments. A better option is to pay with direct debit as it allows you to pay of more than just the minimum.

 

8. 0% balance transfer credit card

A good idea might be to apply for a 0% balance transfer credit card, this allows you to pay of a large sum or all of your debt without paying interest on it for an initial period, you’ll still have to pay a balance transfer fee to move debt across, but it will be cheaper than having a debt. You have to be disciplined if you used this though because its another card which you can borrow money from.

 

9. Personal loan

A good idea might be to apply for a 0% balance transfer credit card, this allows you to pay of a large sum or all of your debt without paying interest on it for an initial period, you’ll still have to pay a balance transfer fee to move debt across, but it will be cheaper than having a debt. You have to be disciplined if you used this though because its another card which you can borrow money from.

 

10. Motivation

Try and set yourself regular targets to keep you motivated, for example, when you pay off a certain amount of debt you could reward yourself with a meal. There are plenty of things you could do to de-stress, such as, going for a walk, going out with your family or even exercising.

 

11. Act early

If you feel like you’re in over your head its best to get it sorted early. There’s plenty of companies you can talk to about debt and how to handle it.

• Step Change (CCCS) – Free Debt Advice
• Citizen's Advice Bureau