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How to better manage your debts

Many of us know how difficult it can be to deal with high levels of debt, and when you have a wide range of creditors to deal with and a variety of repayments to make each month, budgeting and financial management can become very difficult. With credit conditions getting tighter and tighter as a result of the global credit crunch, those with increasing debt problems could face severe difficulties, as the chances of refinancing to cheaper deals or getting further finance to ease financial strain are becoming slimmer and slimmer.

One of the solutions available to help ease financial strain for those with high levels of debt is debt consolidation, and this is where you take out a consolidation loan and use it to repay your existing debts. The benefits of consolidation include making financial management easier, as you only have one repayment and creditor to deal with, and reducing the amount that you have to pay out each month, as the repayments on one lower rate consolidation loan could be far less than the combined repayments on a range of higher interest loans and debts. However, you need to bear in mind that with the tighter credit conditions getting a consolidation loan may be more difficult, and therefore it is a good idea to look at other debt management solutions that do not involve taking out additional finance.

Simply taking stock of your finances and going through your monthly outgoings can make a surprising difference to the amount that you are paying out each month. It is amazing how many of us have the odd monthly outgoing that is simply a waste of money, such as a magazine subscription fee for a magazine that we no longer read, or a gym membership fee when we rarely get time to go to the gym. If you do come across any of these odd outgoings then cancel them and put the money towards your debts, such as your high interest credit cards.

Try switching some of your services and products, such as insurance services, broadband providers, and utility providers, as this could save you a small fortune each month. You can switch your products and services more easily these days, with a choice of price comparison sites to select from depending on your needs, and these sites will help you to find the most affordable service or product based on the information that you provide. You will be surprised at how much you can save each month by reducing the cost of these services and products, and this is all money that can then be put towards your debts.

If you cannot find any suitable solutions to reduce your outgoings and give you more money each month then it may be worth seeking professional debt advice from a trained counsellor. These professionals can help you to deal more effectively with your budget, and could help you to find ways to reduce your outgoings that you may not have thought of originally.

Tom Smith
15th February 2008

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