The most important thing when borrowing money is not to borrow more than you can afford. This means that you’ll be able to pay the debt back, resulting in a better credit record and less financial and emotional stress.

118 118 Money understands that there are times in life when we all need emergency funds. We’re here to help you make sure that your repayments are within a realistic budget, so you could achieve a stronger financial future.

The harsh truths about debt

If you’re reading this and feeling worried about your own situation you are not alone.
According to The Money Charity the amount of debt we’re in is rising, as is the cost of living.

  • People in the UK owed £1.452 trillion at the end of September 2015. This us up from £1.418 trillion at the end of September 2014 – An extra £661.50 per UK adult
  • The average debt per household – including mortgage – was £54,358 in September 2015
  • Per adult in the UK that’s an average debt of £28,742 – Around 112.7% of average earnings
  • Outstanding consumer credit lending was £176.26 billion at the end of September 2015. This is up from £165 billion the previous year and an increase of £224.47 for every adult in the UK
  • Per household that’s an average consumer credit debt of £6,625
  • Total credit card debt in September 2015 was £62.7 billion. Per household this is £2,349. For a credit card bearing the average interest, it would take 25 years and 6 months to repay if you only made the minimum payment each month
  • BUT if you kept the payment at the initial minimum payment of £56, rather than paying a reduced monthly payment, you’d pay it off in around 5 years and 5 months

The figures above may look scary, but it is possible to get a handle on your debt before it takes complete control over you.

Busting debt myths

Let’s start by busting a few debt myths.

  1. There is no such thing as hidden charges!

That’s right, they don’t exist. All lenders are strictly regulated to provide you, the customer, with complete transparency. Everything you need to know about your repayments, payment dates and terms are neatly laid out for you in the small print and you’ll receive a bill every month detailing your interest and the outstanding debt.

Arm yourself with a cup of tea and make sure you read every single word of your loan agreement, credit card plan and monthly bills. You need to know if you can meet the terms based on your current income and expenditure and, where possible, keep your payments above the minimum.

  1. Debt happens when you spend more than you earn

If you’re struggling to meet those minimum payments and each month you’re seeing your debt escalate then its time to do an audit of your incomings and outgoings.

Write down every single penny you spend over the course of a week. Go through all your bills and payment dates to list those too, so you can see if a particular month is more expensive for you than another.

It may sound tedious, but the truth is by taking control of your situation you’ll start to loosen the grasp that your debt has over you.

All of us can learn how to be better with money. Treat it like you’re learning a new skill that’ll benefit you for the rest of your life. If your outgoings exceed your incomings you’ll know that that’s what keeps getting you in debt. If that’s the case it’s time to get brutal and make some cuts.

  1. Debt doesn’t go away overnight

Have you done your audit, worked out your budget and increased your minimum payments? That should do it right? If you’ve had your monthly statement in don’t despair at the pennies your debt has decreased by!

Debt doesn’t go away overnight. It takes time and happens slowly, however you’ll soon see that figure dwindling, which will make a great deal of difference to how you feel about your situation.

  1. Debt affects more than your money

Being in debt affects more than your bank balance, it can put a lot of strain on your relationships. Money worries are a hard thing for a couple to live with and it can feel like they dominate all your discussions and all your choices.

It doesn’t have to be that way! It’ll take time to pay off your debt but by taking positive steps and working together you can feel like you’re in control, plus you can invest in quality time together without worrying about the cost. A home cooked meal and DVD night is a wonderful alternative to dinner and a movie for example, and especially in this weather.

118 118 money are here to help. We have posted several blogs full of tips and ideas on how to cut your living costs, from reducing your bills to saving money at Christmas. With a bit of research and forward planning you can take back control of your debt and start paying it back! We’d love to hear from you, so why not share with us the positive changes you’ve made to increase your debt payments. Remember, you are not alone! We’re here to help.