staycation Caroline Smith

Caroline Smith

The world is in staggering debt (so is the government). In August 2023, the average household in England owes £2000 on credit cards and £60,000 in overall debt. This is no time to feel guilty or ashamed. Being in debt just helps banks (huge profits for shareholders) and lawyers. Also read good reasons not to play the lottery.

If you’re in debt, it’s not going to go away. Get a cup of tea (or large glass of wine), sit at the table and write down how much you owe and to who. Most companies prefer a token payment (it’s less hassle than taking you to court). Download sample letters (also for business) to offer a payment plan. If no joy, then contact a debt charity (below).

Pay off essential debts first (energy, water, council tax), along with debts to family/friends. most payday loans are now banned (don’t go near them). If you’ve got involved with loan sharks, contact a debt charity (below) for advice.

Bailiffs can only enter homes with permission and take goods to sell (TV, furniture, jewellery, cars). They can’t take pets (illegal) nor things you need (washing machines, beds, cookers, vehicles with disabled badges and camper vans if a home).

why are we in so much debt?

There’s economic growth policy, to ‘spend our way out of recessions’, rather than better alternatives (like living simply). Credit cards buy things with money you don’t have (the man who invented them for emergencies, now says he wished he hadn’t). Then we have people duped into 0% interest credit to buy £800 sofas (not free if you lose your job and can’t pay). And lack of repairable items and skills.

The other reason is culture. People want designer-everything at the cost of ethics. In Denmark, there is no celebrity cultur (you can own a boat, but it’s frowned on to boast about it). Not living beyond your means is more important than taking second jobs, which could make you ill from exhaustion. Simplifying life is simpler!

lifestyle changes to reduce your debt

  1. Don’t waste time on energy-comparison sites (listing costs are passed to you). It’s simpler to live simply that will naturally reduce energy bills.
  2. Learn to cook (less grocery bills) and give up smoking/drinking. Go car-free or join a car-sharing club. Train for a couple of years to do what you love (to earn more money for less hours).
  3. You could (if viable) downsize to somewhere nicer but smaller (say a city flat could be swapped for a small home near the sea in a cheaper area). Or rent out a room (tax-free).
  4. Extended family homes are an idea for families who get on. Each relative sells properties (say 3 people sell tiny flats, to buy one larger garden property with free baby/pet/granny sitting on top). For no mortgage (or cheaper payments).

still in trouble? contact a debt charity

nature Jo Starkey

Jo Starkey

Rather than consolidate debts, Stepchange (a charity funded by sponsors) can sort out your debts. Give them a calla ((they’ve heard it all so if you’ve blown £100K on drugs, they won’t judge). Their experts will then come up with a remedy:

  1. Debt management plan is when they take over your debts (often freezing interest) and you pay one monthly affordable payment until back in the black (creditors deal with them, not you).
  2. Debt relief orders (sometimes debts are written off, for low incomes and few assets.
  3. Debt respite (‘breathing space’) gives 60 days to stop paying, until you sort life out (especially if caused by illness including mental health issues).
  4. Bankruptcy is when everything’s written off, if you have no hope of paying debts. It’s an option  to start over. You won’t get credit (but won’t need it if you live simply). Creditors are told but unless someone searches your history, no-one knows.
  5. Equity release is when companies part-buy your home (to inherit) then give money up-front. For people over 55, be careful as there are sharks around. StepChange has free impartial advice.

other trustworthy debt charities

  1. National Debtline runs a good website and phoneline. It has a fact sheet library ((self-employed people can visit Business Debtline).
  2. Debt Advice Foundation (be careful as others have similar names) is a nonprofit.
  3. Christians Against Poverty (helps people of all faiths and none) can set up a plan to save and pay off debt. Churches can run their free budgeting courses (they also run job clubs to help write CVs and brush up on interview skills).
  4. Payplan is the nonprofit arm of a for-profit company, to help with mortgage problems and negative equity.

books to help you get out of debt

get good with money

Get Good with Money is an American book with terrific reviews, which using a simple 10-step process by a former kindergarten teacher who lost her nest egg when a recession (and encounter with a shady advisor) put her in a huge financial hole. She used her teaching skills to pay it all off, buy a house and mdnate into law financial education for schools in New Jersey. An uplifting alternative to money management systems, the 10 steps are:

  1. Build a budget
  2. Save like a squirrel
  3. Dig out of debt
  4. Score high credit
  5. Learn to earn
  6. Invest like an insider
  7. Get good with insurance
  8. Increase your net worth
  9. Pick your money team
  10. Leave a legacy

There are moments when you see someone aligned with their true calling, and that is Tiffany. She can take the most complex of money concepts and distill them into something understandable. No matter where you stand in your money journey, this book has a lesson or two for you. Erin Lowrey

Helps you put all the pieces of your financial life together, without making you feel overwhelmed or ashamed about your circumstances. Whether you need to budget better, slash debt or save more money, Tiffany offrs great advice to let you know you can do this. Lynnette Khalfani-Cox

get the hell out of debt

How to Get Out Of Debt is a wonderful 3-step process to get out of debt by a Canadian woman who cleared massive debt after becoming ‘tired of listening to middle-aged men in suits telling her to consolidate her debt – she got into more debt, and they got rich. Most people who read her book are debt-free in 2 years. A judgement-free zone from cover-to-cover, download free budget plans and spreadsheets at Erin’s website.

How to Attack Debt is a book by a Catholic family, but is for anyone. It looks at what money is (not to buy stuff or invest) and shows how the authors paid off almost $25,000 of debt in less than 8 months.

Stay away from debt at all costs. Debt (not poverty) is the greatest energy of financial well-being and peace of mind. Debt causes us to mortgage our future for the present. They will dress debt up in a suit, and call it credit. But it all comes down to the same thing. You will have mortgaged your future, to pay for your present. And that is something you never want to do. Kent Nerburn

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