This is a sponsored post with StepChange Debt Charity.
I know this might seem like a tough conversation, but today I am going to talk about debt. Whether that’s a credit card balance, a loan or even from a friend, it counts.
The problem with having debt is that it can be so overwhelming. You know the day when you add up the total balance of your cards for the first time and see that number? That feeling. The feeling that you can’t possibly be in this situation and that there is no way out. Chances are, you will want to keep it to yourself.
I remember getting my first credit card when I went to university. I suddenly had all this “extra money” to hand to spend on whatever I want. I didn’t realise initially that a credit card is not free money at all, but money you had to pay back, with added interest. That combined with being able to buy things online, and I quickly had quite a balance on there. It took me a while to pay this off; the lack of income combined with my somewhat impulsive spending really didn’t do me any favours. From that point on, I have always made a point, where possible, of paying my credit card off in full each month.
Because, there is a definite taboo around the subject of debt. Many, many people have it and yet no one is comfortable about talking about it. Online, with the debt free communities set up, maybe. But in real life? Certainly not. The thought of sitting with a friend and talking about the numbers you have worked out might fill you with dread.
You’re not the only one.
This week is Debt Awareness Week and the charity SeptChange got in touch to ask if I would help raise awareness of it plus talk about what services and options there are out there to help. This was before all of the current climate really started to sink in.
That means that there are other worries, more immediate perhaps, than paying off debt. Things such as loss of income and the impact the coronavirus might have on your finances.
Many people might be losing their income at this point in time. I wrote last week about how to deal with a sudden drop in income. But, that combined with perhaps credit card balances that are higher than you’d like and then the panic might start. StepChange want everyone to know that they have set up a dedicated page that is updated daily with advice for people whose finances have been affected by the Coronavirus. Have a look here for that; please check this daily as there might be information that could help your situation.
Uncertain times are already very stressful. Adding to that financial worries and the scale goes off the chart. Money is such an emotive topic and I can definitely appreciate that talking about it in person is so hard. I write a personal finance blog and I find certain aspects very difficult to talk about! However, StepChange are there to help anyone in these uncertain times.
There are different sections on the StepChange website via this link that will help in terms of support as this situation develops. Things like your finances, including advice on what to do if you’re worried about your finances, if you’re already affected or there is a chance you might be.
There’s also advice and support around the benefits system, in relation to the coronavirus. You might be entitled to certain benefits if the coronavirus affects your income. Definitely check this; getting benefits payments can take a while to set up so the quicker you can do this, the better.
In these uncertain times, it is best to try and avoid adding to your debt if possible. This might not be possible if your household has suddenly lost income, but if you are currently getting paid there are steps you can take such as cutting back on things that might not be necessary in your budget, really taking a look at your own spending and seeing what you have at home already. These things can really help when taking that first step. It can be daunting, but you can do it! With your finances, it definitely is a one step at a time method. Especially if you are feeling overwhelmed. It is best to take it a step at a time rather than trying to do everything all at one; you might feel so overwhelmed that you end up not doing much at all and then that won’t help you feel better either.
The main focus point at the moment is to get people talking about their finances, plus reaching out to get the support they need if necessary. If you are struggling with your finances at this current time, then StepChange has so many different ways of helping. Please, talk to someone or go on the website and have a read. There are people you can talk to within the charity who can direct you to the help you need.
Do you have any tips you could offer at this stage? Please leave them below so that people could see them! Opening up the conversation will help everyone.
After reaching a point where my debt was unmanageable and many sleepless nights, I came across StepChange online and contacted them. They advised me to set up a Debt Magement Plan to tackle my debt in a way I could afford. All interest has been frozen and no fees charged and I’m slowly making progress after admitting it was out of control. I’ve felt so much guilt, shame and anxiety but StepChange has helped turn things around. As a single mum, working a lot of hours to get by this has been so helpful. You can start the process of getting help online so don’t even have to talk to anyone about your debt which can be a relief. There are ways to pay your back your debt with guidance and support rather than bury your head in the sand like I’d been doing.
Write down EVERY debt that is owed with a plan to pay it back.
If job loss has created a crisis situation, call every creditor with a plan to pay back at least the minimum so that credit score doesn’t suffer. Perhaps the creditor will grant a temporary suspension of payments. Do not ignore creditors in the hope that they will ‘go away’ because they won’t.
Be honest about the debt situation. Denial is not a plan. Be brutal with yourself and find relief in that honesty.
Do not continue to create debt if possible. Food, however, is essential and the credit card may have to be used. Be realistic.
Devise a plan to get out of debt and follow it. It might take years. A decade. Don’t be discouraged, it can and will be done with focused determination.
Cut back on certain things: Electricity/gas/water usage. Groceries.
Cut out certain things: Restaurants/clothes/travel/smoking/drinking/outside entertainment.
Sell anything of value that is not needed: furniture/cars/jewelry/clothes/collectibles/other junk.
Learn from the experience of hardship/panic/desperation. Make a pledge to never be in that situation again.
Get tough with those inner voices that undermine and derail. Many times, debt situations are caused by emotions that run the show.
I think the biggest tip is Budget. Budget. Budget. I’d go as far as to say, almost nothing else matters but the budget. If you are already in debt, like you say, you want to avoid more debt- and that’s why a budget is just so important.
I agree with the above commenter, just start somewhere and keep focused. There is a light at the end of the tunnel.