Made Mistakes With Money? It’s Time to Put Things Right
School teaches us a lot. It teaches us how to read and count, and later, how to interpret literature and apply Pythagoras’ theorem. We learn about science, religion and languages, as well as a more social side which teaches us how to interact with and work well with others. But there’s a lot that schools don’t teach, and one of these is budgeting, paying bills and working with money in real life such as paying taxes and avoiding debt. And for this reason, we can go out into the big wide world as adults with a great education, but no real idea of how to manage our finances. Offered things like student overdrafts, credit cards, store cards and loans, it’s easy to sign our lives away to these things at a young age and end up in debt. We might end up being irresponsible and spending money we had aside for rent or bills to go and party instead, not fully understanding the situation we were getting ourselves into. If you’ve got to a point where you’re fed up with your money situation it’s time to make a change- here are some of the ways you can go about it.
Get your debt under control
If you’re in any kind of debt, your first step would be to get this under control. If you’re currently only making minimum payments it means you’re only paying the interest, and the debt itself isn’t going down. Your creditor has a duty of care to you, meaning that if you’re no longer able to cope with the bill they have to do something to help you. They could offer you a reduced payment plan, or if you speak to a debt management agency they could work to have interest frozen. If the debt is a little smaller, you could cut back on luxuries for a while and aim to earn some extra money. Take on some extra shifts at work, sell what you don’t need or look into how to make residual income.
Decide how to pay your bills
The next step is finding a system to pay your bills so that you don’t fall into debt again. You should always pay your priority bills first, one way to ensure you don’t end up spending that money is to open a separate bank account just for bills. Each time you get paid, make a transfer using online banking and have all of your direct debits come out of that account. Make sure things like groceries and travel costs are covered before you spend on anything that could be considered a luxury.
To ensure you don’t get into trouble with money again, it’s always worth having savings in the bank. These can act as a buffer if something goes wrong, so you don’t have to rely on credit if you need access to cash. Even a small amount each payday can add up.