the chaotic life

UK’s consumer borrowing has tremendously increased by £ 11 billions in 2007. Borrowing has now broken the £ 11 trillion line. The National Consumer Council reported that for every pound saved British people owed 52 pence. Bills far exceed the income from jobs. Because of this, millions of families in UK are making great efforts to pay or to manage their debts.

Debts are very ordinary occurrences in today’s life. Debts could be the result of job layoffs, divorce and unexpected expenses due to some unforeseen events. Most debts however, are the results of indiscriminate spending and poor money management. Here is a list of 10 financial guidelines to get rid of stress and anxiety causing debts.

1. Assess your debt to income ratio. Debts resulted when people spend more than what they earn. You have to make an accurate budget. List down all the possible expenses for the month against the expected income. Adhering to the budget is very important to the elimination of debts.

2. Organize debt payments. Make use of the snowball system where you pay the credit card with the highest interest rates first. Close the account once the debt is paid and start on the next credit card. Continue the process until you reach the card with the lowest interest rate. This will become your favored or primary credit card.

3. Do not incur more debts; use cash. Credit cards are not real money and keeping your card at home will curve impulse purchases. If you do not have enough money, you will not be tempted spend too much. Credit cards should be used for necessary major purchases.

4. Stop wasting money. Learn to discriminate between real needs and wants. Think twice before you pull out the money to buy the new pair of shoes you saw displayed on a shop window. When you are on a tight financial position you need to make an important choice between a want and a need.

5. Instead of buying highly priced designer items, why not choose to buy off the rack or better still scour the Net for used items. You can find better deals from places like eBay.

6. Be committed to cutback on voluntary spending. A decrease on discretionary expenses such as dining out, a night at the movies, golf games with buddies would have a positive impact on your financial situation.

7. Pay more than the amount due. The money saved from buying used items and from optional expenses can be used to increase the payment for due amounts.

8. Be careful in opting for loan consolidation. No matter what loan predators say, you have to be sure that loan consolidation payment would be lesser than all the payment for your combined debts. Remember that you can end up losing your home this way.

9. Talk to your creditors. You will be surprised at how amenable they will become once they know your financial predicament. They might offer you better deals and some could even forgo the interest on your debts.

10. Find other ways to earn extra money. Aside from part time jobs, you can find work at home opportunities from the Net that will guarantee additional income for working several hours every day.