How to manage financial difficulties

Borrower fear of rejection stalks millions of UK borrowers

Nothing brings a headache like financial worry. And if you do get into difficulties with your finances, the situation can become incredibly stressful. However, there are steps you can take to start improving your financial health – and your peace of mind.

Act now

Don’t ignore your money problem. Yes, it’s stressful talking about financial difficulties, but the sooner you act, the sooner you can start to gain control of your money and improve your financial health.

Talk to your lender

If you find yourself in financial difficulty, the first thing you should do is speak to your lender.

Sit down and explain your situation. You might find it helps to write it all down so you don’t forget anything. Your lender may be able to come to an arrangement with you by extending the lending term to reduce the monthly repayments.

Some loans come with payment holiday options. Or, if you have taken out an insurance policy to protect your repayments because of an accident, sickness or unemployment, now’s the time to think about activating that insurance cover.

Make a budget and stick to it

Simply write down all your day-to-day expenses, such as food, rent or mortgage payments, council tax and travel to work. Then write down all your other monthly bills and outgoing expenses (no matter how small), make a grand total of all your monthly outgoings and measure this against your total monthly income.

This will help highlight where you might be able to cut back on spending.

Shop around for deals

You’d be surprised how much you can save by switching energy suppliers, internet providers, cancelling a gym membership or even finding out if you’re entitled to any benefits you’re not aware off.

In other words, it might feel like you don’t have many options, but all those little changes add up.

Get free advice

Charities such as the Money Advice Service and Citizens Advice offer free, impartial advice if you’re struggling with managing debt. Give them a call and discuss your situation, as they can offer you guidance on the best way to cope with financial difficulty.

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