One way to move towards getting out of debt is to stop borrowing but it is easier said than done. When you are in desperate need of money, whether it’s to buy school uniform before the beginning of term or you need some money to make up the rent it can be hard to see the cost of borrowing and seem easy to take a loan or credit card. However at times like these when we are desperate we may not realise the costly interest rates of borrowing and that there are actually better alternatives that have 0% interest rates. Here are some steps to get out of the habit of borrowing.
Knowing what is essential
There are some things we need in our lives such as the basic needs, food, shelter, and clothing. You can probably think of some other things that you consider essentials, but are they really essential?
When it comes to a time when you can’t afford to pay your internet bill for next month what would you do? What is the smartest thing to do?
What you could do is call your service provider and ask them to cut you off until you can afford it. Remember there are other alternatives to get internet. There are often libraries that offer free Wi-Fi or you can often connect at a coffee shop you may just have to buy a coffee but it is likely to be cheaper than paying interest!
Maximise your income
When you are short of money have you ever considered getting rid of your non-essential or unused items for cash? There are so many ways to sell either through car boot sales, online through eBay or Gumtree or even by word of mouth. This is a great way to make use of something that is unneeded and get 0% interest cash!
There are many other things you can do to maximise your income and make your money go further such as checking you’re receiving all the benefits you’re entitled to and shopping around to make sure you get the best deal.
Form a saving habit
Setting yourself a budget may be the best way to help you start saving. A basic budget looks at what your total incomings are and what your essential outgoings are and then how much money you will have left over. With the money that is left over you could then decide to set aside a certain amount each month to save.
Having a pot of savings could ensure you have a safety net for whenever any unexpected bills crop up and mean you don’t have to turn to costly loans or credit cards.
Ask for help
Always remember you could ask for help before deciding to take out a loan or a credit card. You could ask family or friends if it’s possible to borrow money from them until you have money available to pay them back. Of course we can sometimes feel uncomfortable or ashamed to ask for help especially regarding money but this could work out as a better option for you in the long run so it is always good to consider.
Remember! You can also come to Fair Money Advice if you’re suffering with financial difficulty, that is what we’re here for! Although we can’t pay your bills our advisors will be able to assist you with advice on your best options, how to maximise income through knowing your benefit entitlements and providing you with debt solutions.