The credit crunch has left people from all walks of life struggling under the weight of a growing financial burden. Even those who are accustomed to a higher salary may find themselves over-extended and running out of options. Here are five key areas to address…
- The key aspect of debt management for higher income borrowers to remember is to budget. The vast majority of borrowers who are on the middle to high end of the income scale don’t actually budget. The damaging trend of charging whatever you can’t immediately afford to a credit card perpetuates the debt cycle. The key here is, if you can’t afford it this month, what makes you think you can afford it next? By then there will probably be a host of other purchases that just can’t wait either. Before you know it you will be over extended on a list of cards, covering real debts by shuffling imaginary money from one card to the next.
- Keep on top of your finances with decent records. If you find that your sums aren’t adding up and you can’t quite seem to justify where all of the money is going, you should try keeping a diary of all your expenditure. There are always those items that you buy as a reflex, without even thinking about them. These are the things that add up and push you further into debt before you know what you’ve even bought. This could be a result of impulse buying, emergency buying or those little, seemingly insignificant purchases that all add up. Did you buy your lunch today, or bring it from home? And what about those premium priced cappuccinos?
- Out of sight, out of mind. As simple as it sounds, just try to leave your credit cards at home. If you can’t resist making those unnecessary purchases, don’t put yourself in the way of temptation. It’s much easier to spend money by handing over a credit card. It’s really just imaginary money after all. You’ve not had to earn it. It’s not even yours. Instead, try parting with a crisp tenner. Your purchase takes on a whole new worth.
- The odds of you sticking to a crash diet are slim. Exactly the same can be said about your finances. If you try to make drastic, unrealistic changes to your lifestyle, you’re going to find it hard to stick to. Trying to live without all of life’s little luxuries, you’ll just begin to fixate on your spending and you’ll relapse into bad spending habits. It’s a question of making subtle but long term changes to your day today life. Don’t adopt a lifestyle that you can’t hope to maintain.
- Get yourself some sound advice. There are various avenues open to you and it helps to talk to someone with the experience to guide you through these tough decisions. Your first port of call may be to talk to a professional financial management company, like Harrington Brooks. We could help point you in the right direction by offering information on budgeting and the debt solution that’s right for your circumstances.