Spring cleaning isn’t just for your home; start the new season off strong with our top tips for managing debt
Process your paperwork
When it comes to spring cleaning your finances, paperwork is a great place to start. Whether you’re struggling with your debt payments or have a difficult relationship with money, it can be tempting to ignore the letters that arrive in the post from your creditors, bank, and utility providers.
Unfortunately, ignoring them doesn’t make them go away. If you’ve got a pile of unopened letters or documents that you’ve read once but not fully digested, now’s the perfect time to tackle that paper mountain.
Go through each document, read it thoroughly, and decide whether it’s something you need to keep or not. If it’s not essential, remove any personal details before adding it to your recycling pile. If you think it might come in useful later, file it somewhere you can easily find it again.
If you hate sorting through your paperwork, this might be your sign to make the switch to paperless bills and statements. You might find it easier to keep track when these documents are sent straight to your email and stored securely in your online account.
Tidy your payments
One of the biggest challenges when managing multiple debt repayments is making those payments on time. It can feel like a full-time job double-checking when the next payment is due and finding out exactly how much you need to transfer to avoid paying extra interest.
This spring, make it your mission to streamline your debt repayments. There are a few different ways you can do this, from adding calendar alerts to your phone to setting up direct debits.
Using direct debits to pay your debts is one of the easiest ways to make sure you never miss a payment. As part of the process, you could request the payment date is changed so that all your bills go out on the same day. Making sure this date coincides with your monthly payday, for example, can make sure you’re never caught out and unexpectedly end up in your overdraft.
Declutter your debt
When you have more than one debt payment to manage, it can be difficult to feel like you’re making progress. If you feel at risk of drowning in debt repayments, spring can be a great time to look at new ways to declutter your debt.
This can look different depending on your circumstances. If you have some disposable income available, you might want to try adopting the snowball method to pay off some of your smaller debts. With this system, you’ll focus all your extra cash on your smallest debt and just pay the minimums on all the others.
If you struggle to manage multiple payment deadlines but have good credit and could qualify for a lower rate of interest, you might want to look at a debt consolidation loan.
On the other hand, if you’re falling behind and feel your debt is at risk of getting out of control, you could get in touch with an independent debt expert. Not only will they take the time to understand your situation, but they can also help you find a debt management solution that works for you, whether it’s an informal payment plan or a more formal option like an Individual Voluntary Arrangement (IVA).
Organise your expenses
Spring is a great time to review your budget. Many companies put their prices up at this time of year (especially if they didn’t announce increases in January) so you might find that your monthly expenses have risen more than you might think.
Look at your bank statements for the last three months and group your spending into different buckets. This can help you form an accurate picture of how much you spent on things like debt repayments, food, socialising, and little luxuries.
While a good budget shouldn’t be so restrictive that you don’t have room for fun spending, spring cleaning your finances can help you identify easy cuts or inspire you to search the market for better deals on things like your phone bill or gym membership.
Clear out your subscriptions
Subscriptions often lead to accidental overspending. It’s all too easy to sign up for a free trial that you forget to cancel, take out a plan to watch one TV show or cover a large purchase and then don’t realise it’s still active months later, or face an automatic price increase. Those small £10 and £20 monthly commitments can quickly add up.
While giving your finances a spring clean, take time to go through your subscription plans. Try to be as brutal as possible, cancelling any that you don’t need or take you over budget. That doesn’t mean you need to go without; set a budget for how much you’re willing to spend on subscriptions each month and consider rotating different streaming services, for example, to keep your costs under control.
Dust off your credit report
If checking your credit score at least once a month isn’t already one of your habits, this spring, make a point of logging in and finding out where you stand. Your credit score can impact whether you’ll qualify for a loan or credit card and the interest rate you’ll be offered.
There are three credit reference agencies in the UK and each of them could have a different credit score on file for you. The good news is that you can check them all for free; you can create an account with ClearScore to find out your Equifax score, with Credit Karma for your TransUnion score, and with Experian directly.
Once you’ve got access to your credit report, you can also check it for mistakes. You might find that there are debts listed that you’ve already paid off or missed payments that were actually made on time. If you think something listed on your credit report is an error, you can contact the credit reference agency to get it sorted.
Looking for support with managing your debt this spring? Our friendly team of experts is here to help. Give us a call on 0161 8260 585 or send a message here
