Unfortunately, for 21st-century Britons, debt has become something that many of us are all too familiar with. Whether it’s a loan for a summer holiday you’re desperately in need of, or trading in your old car for a new model on finance, racking up debt is easy to do. In today’s post, we explore the five clear signs that you’ve let your debts get on top of you, instead of the other way round – so that you can take back the reins and get in control of your personal finances.
You don’t feel good
Firstly and most importantly, is listening to your gut instinct. Although it’s completely normal to sometimes stress about money, if you spend nights not able to sleep for thinking about it, and spend time arguing with those close to you about it, it’s probably become a bigger problem than you first thought.
Knowing how to manage debt is the first step in reducing it, and will leave you feeling happier both within yourself and in your relationships with those around you.
You’re just about keeping up with minimum debt payments, or sometimes missing them
Credit cards can be great if used correctly and wisely – but the minute you’re not able to pay the money you’ve borrowed back, is the same minute it can start developing into a long-term problem. What may appear to be a quick solution is paying only the minimum amount due back each month, however, doing this means you’ll constantly be borrowing and paying back your owed credit – which means you’ll find it even harder to eventually clear your debt.
One way to solve this issue is to pay off your combined debts through a debt consolidation loan. This makes managing debt easier as all your debts are combined in to one, simple monthly payment. Also, with some debt consolidation loans, bad credit history isn’t a hinderance, so long as the loan can be secured against one of your assets – which is typically your home. However, whilst this option works for some, it might not be the best option for all, so it’s always worth checking out the pros and cons for each method.
You’re not saving money
No matter your age or your current situation, there’s no better time to start saving money than right now. Life has a funny way of surprising you with a broken oven or a dodgy washing machine when we least expect it, so you’ll thank yourself for having some money saved away for when the unexpected happens.
Keeping your loans in check through debt consolidation can make it much easier to track your outgoings – letting you see exactly how much you can afford to save each month once you’ve paid off the required portion of your loan. Remember, when it comes to saving, every penny counts!
Your total debt is increasing each month
Although at first it may seem frightening, keeping a detailed account of your monthly expenditure and income can help you see exactly how much you have coming in and out of your bank. Of course, most of us want to reduce our debts each month, so, if you’re finding yourself getting deeper into debt because of late repayments and climbing interest, keeping a watchful eye over your finances will help you visualise exactly where your money’s going – and how to prioritise certain kinds of payments over others.
You’re often borrowing money from loved ones
Surrounding yourself with a support system of family and friends is great, but can impact your relationships severely if their generosity is taken for granted. However, if you’re lucky enough to have a friend or family member in the position to act as your guarantor for a loan, a guarantor loan could be a great option for you as an alternative to borrowing money from them outright.
But, it’s worth remembering that the guarantor is also liable for the repayments if the borrower is unable to meet them, so ensure you don’t take out a loan you’re unable to afford – or risk damaging your relationship if you do.
For tips on clearing your bad credit, budgeting and saving, be sure to check out the rest of the articles on the Jolly Good Loans blog.