It’s easy to sometimes lose control of your finances. You can end up dipping into your overdraft or savings. You can start carrying a balance on your credit card. You might even find you’re accumulating a few loans. If this happens, the first thing and most important thing to remember, is that everything financial is fixable.
Once you accept it can be fixed, you can start to take action. Start by writing down everything you owe. Include what you owe your mates and anything you owe in things like missed rent. Then, make three columns: Name of Loan, amount owed, monthly repayment.
Now that you can see the size of the problem all on one page it can sometimes, but rarely, be a positive surprise. We can catastrophise stuff in our head but when we lay it all out, then it’s not so bad. However, it’s ok if your reaction is horror and you’re left wondering “How did I get into this mess?”. Accepting you are where you are, is the most positive thing you have ever done to fix it.
Once you’ve identified the problem in full, the next step is to take action. Get a quick win in by using whatever extra cash you have, to tackle the loan with the least amount outstanding on it first. Then, continue to make the repayments on the all the loans from whatever source of income you have and keep doing that.
There are a couple of lessons you can learn from getting yourself in over your head when it comes to borrowing money:
- Sticking your head in the sand does not work. Talk to yourself openly first and then if you need to talk to the bank and the people you owe money to. Talking helps.
- Like a leaking tap, doing nothing means the problem often gets worse. Take action.
- Missing out on doing things with your friends because you are trying to sort out the financial mess you got yourself into is a good thing. It means you will hate being in debt.
- Most importantly, talk to your bank – they can help because rest assured, there is always a solution.
- Don’t ever get too stressed over money problems. While it may not feel like it right now, it’s never as bad as it seems.
If you need independent financial advice, you’ll get it at:
MABS – Money Advice and Budgeting Services: 0818 07 2000
