Financial Peace of Mind: Top Tips to Get Out From Under That Looming Pile of Bills
Posted by : Premraj | Posted on : Friday, November 27, 2015
Getting into debt can feel like entering a blind alley and the stress of not seeing a way out of your current situation can leave you constantly worrying about those bills piling up.
There are short-term strategies that you can use responsibly such as payday loan from someone like Money Boat and other similar lenders, but for longer term financial peace of mind, your aim should be to work out a plan that will allow you to pay off your debts.
Formulating a plan
In order to address your debt situation and formulate a plan that will clear the bills over a period of time, you will need to make a list of everything you owe.
Make a list of your debts and don’t leave anything out, as you have to be honest about the situation as well as accurate, so you know exactly how much you owe. Your aim should be to prioritise your debts, as the consequences of not paying a debt like a mortgage are far more severe than if you default on a store card payment.
You don’t really want to miss any payments but in the overall scheme of things and if you have financial problems, the best way out of the situation is to prioritise your debts into want absolutely has to be paid (like your mortgage or rent), utility bills and so on in order of importance.
Facing an eviction or repossession order is not something you want to do if you can help it, which is why prioritising your debts should be your first step.
There are a number of options to consider if you simply can’t pay your bills at this point in time but you should think very carefully and take some advice before considering something like an administration order or bankruptcy, as these all have serious implications on your future credit score.
It is definitely preferable if you can come up with a workable plan that allows you to pay your existing debts over a period of time without entering into an official or formal arrangement like an administration order, so that should be your achievable aim, especially if you act without any further hesitation.
Check your credit score
If you are not sure what lenders are saying about you and how your credit score currently stands, it is always a good idea to get a copy of your credit report.
You can now get a free copy of your credit report so you can check your credit score and also see if the information show is correct regarding your payment history and what loans you currently have.
If you are thinking of applying for some sort of loan, check your credit score first, as this will give you an indication of if you might get accepted. An application for credit and a subsequent refusal will be recorded and could hinder your chances of getting a loan at all, so it is best to check your status before applying in order to preserve what you current have in terms of status.
Look for a better deal
Depending on your credit score, you might be eligible for a balance transfer, which means switching from your existing credit card provider to another one who is offering a lower rate or 0% for a period of time.
Credit card interest can be very high and any opportunity to clear a balance or at least switch to a better deal, could help in your efforts to reduce your debts.
The same principle applies with your other borrowings like personal loans and store cards.
See if you can get a better deal if you consolidate your loans into one repayment at a lower rate or at least check to see if you can reduce the amount of interest that you are being charged each month.
Savings and debts
When it comes to peace of mind, it is always nice to have a bit of money behind you so that you cope with the odd unexpected financial emergencies, but there is a delicate balance between having savings but owing money on credit cards and overdrafts.
It would be preferable to pay off debt before saving, as this could save you hundreds each year and when you are clear of your debts or in a better financial position, you can revert back to a saving strategy.
Financial peace of mind is often achievable, provided you formulate a workable strategy to tackle that pile of bills in the right way.
Jennifer McKenzie has enjoyed most of her working life in financial positions. She also enjoys sharing her personal finance ideas and insights through blogging. Her articles mainly appear on business and personal finance websites and blogs.