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Dealing with debt and budgeting

Wednesday, September 30th, 2015

Dealing with debt

When money is tight, borrowing can be tempting. It can only be beneficial if you can pay back the money. If not, it can create bigger money problems.

If ignored, debt problems can escalate and take over your life. It’s important you open your bills and deal with the debt straight away.

Understand your debt issues

Do you often use credit to pay regular bills, but then find you can only manage the minimum repayment? That’s just going to build a debt. Here’s how to deal with debt:

  • Try to put your debts in order of importance – some will be more urgent to pay than others.
  • Work out how much you can afford to repay each month.
  • Contact your lenders to work out a repayment plan you can afford.
  • Make sure you’re getting everything you’re entitled to – benefits, tax credits, child maintenance and the right amounts.

If you find that this is not working, it is crucial to seek help with your situation. By dealing with the current situation immediately and getting debt advice, you can help make sure this does not re-occur.

You can search for further support via these websites:

Citizens advice

Money advice service

Budgeting and using a budget planner

It is likely that you will find yourself with less money to live on after your break-up. In turn, try to plan a new budget as soon as possible.

Using a budget planner

Many people find that when budgeting, it is helpful to use a a budget planner. A budget planner can help you:

  • Work out how much money you’ve got coming in.
  • See how much goes out each week or month.

When you’re using a budget planner, remember to include the things you only pay for occasionally or annually, like car taxes or insurances. Also, try to keep a bit aside for emergencies.

Before you start filling in your budget planner

It is vital to gather as much information as possible about your finances before filling in your budget planner. This will make it easier to work out how much you’ve got coming in and going out. For example, look at your mortgage statements, wage slips, bills and bank account statements. You could even try keeping a “spending diary” so you keep a record of every penny you are spending.

Once you’ve filled in your budget planner

When completing your budget planner, it should be easier to work out how much you need to live on. It is vital not to spend more than the amount of money you’ve got coming in.

Budgeting when you have children

It is important to include the costs of what your children need in your budget planner. You could use your budget planner to show your child’s other parent the costs involved in raising your children. It may also help to get your child’s other parent to use a budget planner too ? this is to agree on how both of you can look after your child/ren. Their budget planner could help you think about what the other parent can afford.

  • First agree how you’ll share the financial support for your child.
  • Work out how much child maintenance you’ll pay or receive.
  • Write it down to avoid any misunderstandings later on.
  • Both sign and date your agreement.

Remember, the cost of bringing up a child changes as they get older. So it makes sense to review your budget planner- and your child maintenance agreement- regulary.

Source: Sorting out separation

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