Top Tips on Handling Debt

Posted by admin on June 23, 2020

Being in debt can make you feel trapped. You might feel unlucky, or blame yourself and label yourself ‘irresponsible’. You might feel embarrassed or ashamed, feeling that to fall into debt must mean you are disproportionately bad with money. 

But you would absolutely not be alone in having debt. In fact, most of us will fall into debt at some point in our lives - and it’s nothing to be ashamed of. In January 2020, the average debt per UK household was £60,363. This isn’t just mortgages and loans - the average household credit card debt is £2,595, according to The Money Charity

The good news is it’s fixable. The further good news is that there are routes out of debt you hadn’t even considered. 

We’ve compiled some top tips on handling debt and how to carve a path out of the red and into the black. 

Understand your debt and your earnings

Do you know exactly how much you spend and what you spend it on? Probably not. 

Have an in-depth look at what money is going in or out of your (and your partner’s, if applicable) bank account. 

The simplest way of doing this is going through a bank statement and checking off each outgoing payment against the items or services you’ve paid for. Make a note of which payments are one-off and which payments repeat weekly, fortnightly or monthly. 

Query everything you don’t recognise, with your bank if it’s unclear - you may be paying for something you didn’t know about or worse, be a victim of fraud. 

The next step is to work out exactly how much money you get. This might be from work, benefits, child support or pensions. Make a note of this. 

Make a budget

Now you know exactly how much money you get and how much you spend, it’s time to document it somewhere. 

If you’re computer savvy, we recommend a spreadsheet like Microsoft Excel or Google Sheets. If not, you’re in luck - StepChange, a debt relief charity, have an excellent Excel spreadsheet or a printable PDF pre-made you can use to budget. All you need to do is input the figures. 

Once this is set up, subtract your outgoing from your income. If it’s a positive figure that’s great news - as long as you keep it up you will be gaining money each month. If not - it’s time to start thinking about cutting down your costs…

What is ‘essential’?

Getting out of debt might mean you have to cut down on some luxuries. And if it’s severe debt, what is ‘essential’ has to change. 

TV packages, even TV licences, holidays, takeaways, designer clothes. All the things which make life a little sweeter, unfortunately, may have to be paused. And we say paused not stopped, because the aim is to get out of debt, which will eradicate any interest you have to pay and leave you with more money in your pocket every month. 

You can also swap branded products for own-brand. Many supermarkets have imitation brands which give the quality of a branded product but at half the price.

But don’t worry - once you sort out your finances, you should be able to bring some of these sweeteners back!

Are you paying too much?

There are an array of comparison sites out there which will tell you how to get the same service for less. Here are a few services you can visit comparison sites for:

  • Internet

  • Phone contracts

  • All types of insurance 

  • Utility bills, like gas, water and electric

  • Gyms

Just type ‘comparison site’ into Google and see what pops up. Popular sites include MoneySavingExpert, GoCompare and Compare The Market. 

If you’re in serious debt…

This article was written to give you tips on how to save money and work your way out of debt. But we understand that some people are simply in too deep and need help to get out of an otherwise impossible situation.

If you have serious trouble with debt that you can’t see yourself getting out of, please visit a debt charity.  StepChange are a superb charity who have spoken to hundreds of thousands of people, without judgement. 

Sell or pawn your unwanted items

If you have a valuable item or two stashed away gathering dust, why not pawn that item with us here at Cuttings? We can offer you a loan against it, assisting you financially through a tricky period, and we will simply keep hold of the item as a guarantee.

Get in touch with us today to find out more. 


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