At first your debt reduction plan feels like a challenge and a chance to remake your life – which it is, but most people end up pretty fed up at points along the road as it twists and turns and you can’t see the end in sight.
Perhaps you are snowballing and keep having to work out which debt to overpay next and whether it’s worth applying for a balance transfer card. Or you worry that you are paying off so little on your DMP that it doesn’t seem worth it. Or that “five year” IVA now seems like a life sentence.
Welcome to “the slog.”
Some people give up – bad idea! Debt problems get worse, and the next time your options will be fewer and even less nice.
So you need to find ways of coping. Here are some approaches that might work for you:
Some people decide that as they have to do this, they are going to do it “properly”. They track their expenditure in great detail, have spreadsheets with projections pinned to the fridge and monitor their bank accounts every day.
But you don’t have to go that far. A simple filing system only needs a few minutes of your time every week to use and may make you feel much more in control of your money. For example, all the letters about their debts are filed in date order, in a folder using dividers for each creditor.
If you have spent much of your recent life dreading getting a letter from a creditor, perhaps shoving the envelope away in a drawer unopened, then you might get a certain satisfaction in this approach, relishing being on top of the situation. It makes another letter from a creditor something you handle positively, rather than dread.
Allocate a time each week for thinking about your debts
Check how your budget is going this money; note if you have an insurance coming up for renewal that you should shop around for; have a hunt for a new and cheap recipe; think ahead to a child’s birthday next month etc.
Boring? Yes, but the flip side is you refuse to think about your debts for the rest of the week. After all, your spending is tediously on track. There isn’t anything positive you can do tonight, so switch off and do something more fun. Just because you are going to be climbing your way out of debt for the next few years doesn’t mean you have to think about it all the time.
These don’t have to be the major ones – being discharged from bankruptcy, or clearing your last debt on a Debt Management Plan.
Along the way there can be lots of small ones – got that horrible MBNA card balance down to ONLY £1,000? That calls for a chocolate hobnob!
Keep an eye on how far you have come
If the total of your debts is still dauntingly large, remember how much you have already achieved. So £6,000 to go is still a lot, but if you have already paid off £2,000 of the highest interest debt, then you are making good progress.
And if you are kicking yourself for getting a takeway last week, remember that this used to do this twice a week!
Get some support along the way
But sometimes, especially on Friday and Saturday nights, it can feel as though you are the only one in when the rest of the world is out partying.
Actually, there are hundreds of thousands of people in Britain who are seriously tackling their debts. Some of them are blogging their journey, sharing tips, emotions, successes and bumps along the way. Or they are chatting on online forums.
You may just want to read forums at the start, but you can join in with a nickname if you like. Then even at midnight, you can complain about the slog, record your mini-successes and bemoan the fact that your wretched car needs new tyres.
The kindness of strangers can be overwhelming and get you through many a tough evening. Sometimes a fresh pair of eyes and ears can come up with an idea you haven’t considered.
Think about an emergency fund
If you seem to be hitting too many unexpected problems, then one approach is to put aside some money every money as an emergency fund. In theory you could do better by paying every possible pound off your debts rather than have savings, but it can make for a very bumpy ride, see Save an Emergency Fund or Pay off debts?