Amid the cost of living crisis, some money experts have revealed their four steps to go from debt to four-figure savings by the end of the year
With 15% of UK adults estimated to be in debt, and energy bills due to skyrocket as winter approaches due to Ofgem’s price cap rise, many are looking to pinch pennies wherever possible. However, many find themselves stuck in the mental and financial spiral of; if you can’t pay off your debts how are you supposed to save to avoid future debts?
Head on research A vast majority of people have the instinct to stick their heads in the sand if they can sense they’re heading into debt they can’t find their way out of. But the experts warned this could be the worst thing to do and encouraged people to tackle their debts head-on as soon as possible.
Talk to lenders Alongside this, the experts encouraged people to speak to the institutions and people they owe money to, rather than being intimidated by them. They explained: “For instance, Individual Voluntary Arrangements offer personalised repayment plans tailored to individual financial circumstances. Ensure that any payment plan that you agree to is sustainable for you in the long term, and not just a temporary solution.
Finally, for those wanting to action a quick, simple budget from today the experts recommended the 50-30-20 rule which can work for any individual whose essential expenses don’t equal more than 50% of their income.
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