FIGHT with dDebt can be incredibly stressful, but there are a number of methods you can use to get yourself on track to paying it off.
With energy bills set to hit £3,612 this winter and soaring inflation, it can be tough to pay off your debts.
However, there are tactics you can use – and additional help available – that could help you get out of debt.
From the snowball effect to paying off your highest-interest debt, we’ll tell you how to approach cleaning up your finances.
The Sun spoke to expert Jonathan Chesterman from debt charity StepChange.
Debt advice policy manager talks about his best advice.
make a budget
Jonathan says this is the most important thing you can do before tackling what you owe.
He said: “The first step when dealing with debt is to understand how much money you’re taking in and taking out each month.
Make a budget to see if you can save money in other areas, so you’ll be able to pay more for your debts.
It can also help you identify areas where you’re overspending, so you can try to cut spending and avoid taking on more debt.
There are a number of useful tools online that can help make budgeting easy.
MoneySavingExpert.com offers an easy-to-use budgeting spreadsheet, and there’s a free government budgeting tool that might help you get the hang of it.
You can also try a budgeting app, there are plenty of them and many are free – we’ve tested some of the best ones, and they could help you save thousands of dollars.
Once your budget has been established, you will be able to view your debts.
It is important to then identify if any debts are attached to what Jonathan classifies as “priority invoices”.
This is because the consequences of not paying them are greater than with others, although you still have to track all your repayments.
Priority payments include rent or mortgage and council tax.
Talk to your creditor
Talking to your creditor can help you better plan how you will need to pay off your debts, but also when you can aim to pay them off.
A creditor is anyone you owe money to, such as a credit card company, mortgage provider, or even an energy company.
Don’t bury your head in the sand, the first time you go into debt you should always give your creditors a call.
If you don’t, you could face late payment fees and your debt could continue to skyrocket.
The help you get will depend on the company. For example, energy companies may give you a one-time grant and credit card companies may give you a payment holiday.
Jonathan said: “You may be able to negotiate a payment plan with your bank or take advantage of a grant that can pay off all or part of a utility bill.
“Also, many creditors will agree to give you a break with a payment holiday while you sort out your finances.
This is a temporary arrangement where they can freeze interest and fees for a short time”
If you’re looking for targeted debt support, the government’s debt relief program, also known as Breathing Space, is essential.
It’s free and a person in debt has the right to legal protection against their creditors.
Under this program, people can freeze most interest, fees and charges on debts and suspend enforcement actions and contacts with creditors.
This “breathing” period can then be used to proactively obtain available support from your creditor.
Pay off the highest interest debts first
Once you’re ready to begin the process of freeing yourself from debt, there are plenty of ways to pay off what you owe.
Some find merit in using the “debt snowball” method. Here, we start by paying off our smallest debts first.
You will then shift into high gear to pay off the bigger debts after your smaller ones have been paid off.
Others may find the opposite approach more useful. This is when the “avalanche method” comes into play.
This method allows you to pay off your biggest debts first, then gradually work your way down to pay off your smaller debts last.
However, Jonathan said your best start is when you pay off your highest interest-bearing debts first.
He said: “You may have to wait longer to completely clear some of your accounts, but it will be a cheaper and more effective way to clear your long-term debt.”
This means that you pay less interest overall because you accumulate less by paying down the debt.
This can save you more in the long run than using the traditional avalanche method – which only focuses on the total amount of debt.
Get a credit card with balance transfer
Some credit cards allow you to transfer the balance from another card.
You’ll need to be accepted for one first, and if your credit rating is bad now, you may find it harder to get one or access the best deals.
However, for those who are accepted, Jonathan says, “Switching debt from a high interest card to a low interest or 0% card can help you pay off the debt faster.”
For example, Sainsbury’s Bank currently offers a balance transfer credit card paying 0% interest for up to 34 months.
Santander follows closely by offering 0% interest on its balance transfer card for 33 months.
Jonathan warned that you should watch out for fees when transferring a balance. Most credit card providers charge 2-3% of the amount you transfer as a one-time fee.
If you’re transferring a balance to take advantage of a lower interest rate, the fees may mean you’re saving less than expected, so do your research.
And be careful, as soon as the 0% period is over, you will have to pay high rates again, so make sure you pay off your debt during the interest-free period, otherwise your debt will continue to grow.
And don’t be tempted to use the new card for your spending, or you risk getting into more debt.
What to do if you are struggling with debt
If you’re looking for general help and advice to help manage your debt, there are a number of charities and organizations that might be able to help:
You can contact National Debtline on 0808 808 4000.
An advisor will ask you questions about your income and expenses, so try to have as much information as possible ready when you call.
They will help you determine what you can afford to repay and choose the best solution for your debt.
Self-employed people can also get help through Business Debtline.
Step Change can be contacted on 0800 138 1111.
He can explain different options to you such as Debt Management Plans (DMP), Individual Voluntary Arrangements (IVA), Bankruptcy and Debt Relief Orders (DRO) if appropriate.
Citizens Advice is also available on 0808 800 9060.
It’s a free, unbiased service that can help you develop a plan to get your debt under control, including which payments to prioritize and how to lower your living expenses.
The organization’s website has a helpful page with advice on many aspects of debt, but you can contact them for more personalized help.
Local organizations may also be able to provide support in your area.
National Debtline also recommends contacting organizations such as Mind, Samaritans and Anxiety UK if debt worries are affecting your mental health.
A benefit calculator can help you work out if you are entitled to extra cash.