Feeling Overwhelmed by Debt? Here’s What You Can Do!

Debt is a challenge that most people encounter at some point in their lives. In the UK, as of 2024, over 7 million UK citizens are struggling with some form of debt, whether it’s a few hundred pounds or thousands. Effectively managing debt is essential to achieving financial freedom, yet many people find it difficult to deal with their financial obligations, leading to increased stress and anxiety. The number of individuals facing difficulties in addressing and discussing their debt has risen significantly in recent years, making the issue bigger. However, it’s important to remember that debt is manageable with the right approach. By dedicating time, effort, and careful planning, you can gradually regain control of your finances.

There are countless budgeting methods, tips, and advice available online to help you manage your debt. Sticking to a strict, structured budget is key to repaying what you owe while ensuring you can cover your monthly expenses. But how do these strategies actually work?

Recognising the Problem 

Recognising the problem is the first and most important step when dealing with debt. Whether your debt comes from mortgages, loans, bills, or simply overspending, it’s crucial to know exactly what you’re dealing with to work towards financial freedom. Studies show that many people end up in debt not because of poor money management but because of unexpected life changes that impact their finances. No matter where your debt comes from, it’s important to acknowledge it so you can figure out the best way to move forward.

A common issue is that people know they have a debt problem but don’t take action to address it. This can cause the debt to grow, making it even more stressful and harder to manage. Taking steps to deal with your debt early on can prevent it from becoming overwhelming and help you get back on track financially.

Prioritise Your Spending

Once you’ve acknowledged the problem, the next crucial step is to prioritise your spending to get back on track. This involves determining which debts or expenses need your immediate attention and focussing your spending accordingly. Most people prioritise their expenses based on the potential consequences, starting with the most critical bills—such as rent or mortgage payments, council tax, energy bills, and loan repayments. These essential payments should take precedence over less urgent expenses, like subscriptions or memberships. By focussing on the most pressing financial obligations first, you can begin to regain control of your finances and work towards a more stable future.

Seeking Advice and Getting Help

It’s important to seek advice, even though it may feel daunting. While it might not seem like the easiest option at the moment, following expert guidance can be more beneficial in the long run than relying solely on your own judgment. If you’re having trouble with loan repayments, reaching out to your lender is crucial. Inform them about your current financial situation—many lenders are willing to be flexible with late payments given the current economic climate.

Seeking help doesn’t have to be expensive. Numerous online services offer free financial advice, ranging from basic information to detailed, personalised assistance. There’s a resource available for everyone’s needs. For support, consider visiting government debt advice sites or the MoneyHelper for guidance.