8 tips to free yourself from debt

When you are struggling with debt, it can feel like you’re trapped forever – but there are things you can do to free yourself.

1. Get an overview and make a budget

Review your bank statements and find out what you're actually spending your money on. Put all your expenses into a budget sheet to see a full overview of your finances. This is a great opportunity to check if you are prioritising the right things and where you might be able to cut back.

2. Make a list of all your creditors

Write down who you owe money to, how much you owe, and the interest rate on those debts. It may feel frightening to see the scale of the problem, but this is the only way to tackle the issue and work towards your debt free day.

3. Start by paying off the most expensive loans

If there are loans with high interest rates, it makes sense to pay those off first. Without defaulting on other commitments, make sure any extra cash goes to pay off the loans that are costing you the most to maintain.

4. Consolidate your loans

It may be possible to combine loans so that you only owe one loan. This makes it easier to pay off the loan and maintain an overview of your finances.

5. Get rid of your small loans

Instead of paying off all your creditors equally, getting rid of the small loans that are easy to pay off immediately is a good idea. This will simplify your finances and allow you to focus on paying off the main debt.

6. Make use of automatic payment options

Set things up so that your payments go out automatically. That way, you make sure you are paying on time. By paying your bills before the due date, you avoid reminder fees and debt collection. Should you still receive a bill from a collection agency, it is important that you contact the collection agency or the creditor as soon as possible to resolve the matter.

7. Pay off your debt

Being in debt is expensive so it’s important to focus on paying off your loans. If you can’t find all the money at once, you can contact those you owe money to and see if you can enter into an agreement to pay in manageable instalments.

8.  Talk to your creditors

It is important that you talk to your creditors so that you can find a solution together. By keeping the dialogue going, you’ll be able to access the help they can offer. For example, it may be that you can agree an interest rate freeze so that your debt does not increase further. It may also be that you can have your debt put on hold, so that you can get some breathing space and perhaps the opportunity to get small loans out of the way or pay off the expensive loans.