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Is Getting your finances under control your New Years Resolution for 2021?

Published on:December 30, 2020Author:Darcey Budsworth

A few tips on how to make this happen…

Have a Subscription Clear Out.

Netflix, Amazon Prime, Now TV, Disney+, Glossy Box, iTunes, Gym memberships, the list can be endless. Do you really use or need them all? Part of your new year’s resolution may also be to spend less time in front of a screen, in that case take away the temptation and kill two birds with one stone! Cut down your subscriptions and free up that extra cash to repay debts or put into your savings.

January Sales.

Remember, it’s only a good deal if you were going to buy it in the first place. Do not be tempted by the dozens of emails that are bound to coming flooded into your inbox, impulse purchases are not going to help get your finances back in control.

Pack up, don’t take out.

We’ve all been guilty of grabbing that meal deal or takeaway coffee, but that extra £3.50 per day, 5 days a week adds up to a whopping £910 a year! Hopefully that’s enough to motivate you to dig out that lunch box and remember you pack up in future!

Remove the blindfold.

Not really sure where to start, what you’ve got coming in and what you’ve got going out? We’ll there are free apps out there that will help you to monitor all your incomings and outgoings. Take a look at Money Dashboard or Emma which allows you to view all your accounts in one place and automatically groups together your transactions into groups such as, groceries, electricity etc. This will allow you to set yourself budgets and you can keep on track throughout the month and cut back on wasted spending.

Put a plan in place to clear your debt.

The average debt that we deal with at The Debt Advisor is around £23,000 which will cost at least £650 to £700 a month in repayments. This level of debt is easily racked up by spending on cards and then consolidating the debts into loans and repeating the sequence a number of times. Serious debt is debilitating and will take it’s toll on your mental health and your relationships.

The first step is to find how much, if anything you can afford to pay towards your debt. We do this by pulling together an income and expenditure budget. Our debt calculator will help you achieve this. The detailed calculator will help you work out how much spare money you have after covering your household bills and essential personal expenditure, which may then be available to cover your debt payments. If the money left over isn’t enough to cover your monthly debt repayments, or is likely to take you years to clear, there is a range of debt solutions you can consider.

Debt Management plan allows you to repay your debt in full in affordable monthly instalments. It has the affect of consolidating your debts to one payment which is then distributed to each of your creditors on a monthly pro rata basis. It also has the added benefit subject to creditor’s approval of interest and charges being frozen.

An IVA is a formal solution which again allows you to make affordable monthly payments usually over a 5 year period. After all payments into the IVA are made and is completed successfully the remaining debt is written off.  

If your debt is under £20,000 and your cannot afford more than £50 towards your debt payments and you have little or no assets, a Debt Relief Order “DRO” maybe appropriate and only costs £90 to apply.

Bankruptcy has become easier to access. The application is online and the cost is £680. Bankruptcy could be relevant if you have debts above £20,000 and you have little in the way of assets (excluding your personal and household possessions which are excluded).

Due to Covid-19 we have also introduced Low and Grow debt solutions. So if you are in a position where your income has temporarily been affected and need to consider a solution with an initial lower monthly payment until your income increases again, we may be able to help. 

All these solutions need careful consideration as they all have risks and benefits. There is free debt advice available which can be accessed via The Money Advice Service.

How can The Debt Advisor help?

We are debt solution provider regulated by The Financial Conduct Authority. Our advisory team are available on 0800 085 1825 and will go through a fact find with you aimed to finding the most appropriate solution.

Finally, on behalf of The Debt Advisor, I would like to wish you success in getting your finances on track for 2021. Happy New Year