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The Christmas tree and decorations are carefully stored, presents welcomed or discretely hidden away and you are now dealing with a hangover, not of spirits consumed but of debt acquired during that shopping spending frenzy! Sound familiar! You are not alone, but how to deal with Debt Hangover! 

Here are 4 tips to guide you.

1. Get help if needed: Feeling overwhelmed, need advice, contact a professional financial advisor. They have the expertise to guide and support you. Don’t wait until Debt collectors are knocking on your door.
2. Consolidate your debts: if you are juggling multiple accounts, debts, consolidation may be an option. For example, with several credit cards there might be the opportunity to move balances into one. Speak with your providers to see what deals are on offer.
3. Prioritise your payments: Arrange payments in order of what is due now, overdue or if legal action threatened. Asap contact your creditors, don't throw unpaid bills in the rubbish, that doesn't solve it! 
4. Paying off Debt: Start by reviewing your spending habits.

Here are a few suggestions towards reviewing your current financial commitments:

• Tighten your belt! Now is the time to review the number of subscriptions you have, such as streaming services, entertainment and lifestyle memberships.
• Avoid entering ‘buy now pay later’ platforms and schemes in the hope of catching up. These offer quick access but usually come with late fees and penalties.
• Review ongoing bills: Take stock of your finances. This means an honest, close examination of all your regular expenses and payments then exploring ways to lower your spending. 
• It's budget time! Draw up a budget that includes all outgoings, essential costs such as Insurances, mortgage etc and all discretionary items. Get all household members involved, and stick to it.
• Going forward, where possible re-pay more than the minimum, even small amounts on a regular basis overtime helps to reduce debt. 
• Determine what are essential items and what are non-essential, discretionary purchases.

Debt can be reduced with time and commitment. It’s about getting back to the basics, reviewing spending habits.  Importantly, plan, set a Budget and stick to it!

Living beyond your means! are you overcommitted, caught up in a lifestyle that is financially beyond your means. For example, you have purchased your dream car but the loan repayments and running costs are crippling your finances! If you have answered yes, something to think about, is frugalism! See our following blog next month.