For the first time since 1991, the UK is in a recession. Unemployment rates are high, retailers are closing up shop, and lenders have dried up loans. This is the time to have a close look at what can be done to get through the recession without incurring extra debt. Here are some tips to help you survive the recession.
- Don’t ignore the problems. If you are receiving letters and phone calls from your creditors, do not just ignore them. Take a proactive attitude toward the problems. Talk with them. Acknowledge the issues and work out a plan with them to pay back what you owe. If this doesn’t work, then contact a financial adviser or debt management company to help you sort out the matter.
- Look to the professionals. There are many places you can seek help and guidance from if your financial issues get out of hand. Think about contacting Citizens Advice or the Consumer Credit Counseling Service.
- Prioritize your debts. You need to take careful stock of which creditors need to be paid first. With some debts, your non-payment can have more dire consequences. For example, you want to handle rent or mortgage debt first because you could obviously lose your home if you do not. If you talk to a good debt adviser, they can help you decide which bills need to be paid first and help you set up a budget.
- Budget your expenses. You really need to put into writing what your costs are and what your monthly intake is. The best way to do this is to create a formal budget.
- Think long and hard before taking out a loan to pay off debt. If you take out a mortgage loan to repay debts, you are just sinking further into debt, and the interest rates will undoubtedly be hard to manage. In the long-run, you could lose your home, and this would be an outcome that no one would want.
- Know what benefits you might get if you lose your job. If you lose your position, there are several benefits you may qualify for, including the housing benefit, the jobseekers allowance, and income support. This can help you plan for your recovery should you lose your job.
- Minimize your fuel costs. You can apply for a grant to fit your home with insulation to help minimize fuel costs. Also, if you or your partner is over 60, you may qualify to get a winter fuel payment benefit. Visit http://www.direct.gov.uk for additional details.
By arming yourself with the right information and taking certain careful planning steps, you can avoid or at least minimize some of the problems you might face during the economic downturn. This is the time to take a sober look at your life and your spending and face facts, rather than bury your head in the proverbial sand. Remember that there is help out there and you are not facing this alone.
