Debt has been a prevalent issue in the UK and other countries. According to recent reports, more than a fifth of adults (which equals around 11.5 million) people borrow money. The report further states the reason for this alarmingly increasing rate of debt is the increased cost of living. 

As people struggle with the challenges of rising expenses, unexpected financial setbacks, and economic uncertainties, many fall into the trap of borrowing to make ends meet. However, when you borrow money, it needs to be repaid, resulting in a big cycle of debts that cannot be broken easily.

If you, too, are someone who is continuously being weighed down by the burden of debt, you are not alone. Breaking through the never-ending cycle of debt might seem impossible, but trust us, it is not!

With a few small changes in your habits and some strategic planning, you can efficiently manage your finances and break the debt cycle for good. What are these tips? 

To help you in the process of gaining financial control and breaking free from the cycle of debt, we have compiled a list of five practical tips. These tips will not help you make an informed decision and pave the way toward a more financially stable future. 

Let’s get started!

1. Consider Debt Consolidation

Dealing with debt can be overwhelming. You are required to handle various tasks at a time. From interest rates to payment amounts for each debt, you need to keep track of everything. Additionally, due to this chaos, you may miss the due date, which will incur additional costs. 

To ease your situation, consider consolidating your debts, enabling you to handle only one monthly payment. A consolidation debt rolls all your debts into a single, more manageable payment. For instance, if you are struggling with a number of high-interest loans, then certain personal loans for bad credit in the UK can be used as a debt consolidation loan. 

2. Avoid Using Credit Cards

Credit cards may sound like an enticing option when you are dealing with financial challenges. However, if you fail to pay the bill in full every billing cycle, they tend to push you further down in debt. 

It may not seem like it, but the accumulating balances, along with interest charges, can quietly transform into a substantial debt burden over time. However, do not cancel your cards altogether, as it may negatively impact your credit score. Learn to control your spending and be mindful when using your credit card.

3. Think About the Interest Before Purchases

It is natural for us to be compelled by a great deal or discount when shopping. Even though you may not really need it, you may swipe your credit card to make the purchase. 

If you are already grappling with multiple debts, succumbing to impulsive buys will increase your financial challenges. This is especially true if you are making purchases through a credit card, as they come with hefty interest charges. 

Before you go ahead with such transactions, take a moment to evaluate your situation. Think about whether the interest rate the purchase entails is worth the spend. Calculating the interest rate will give you a realistic idea about the actual costs of an enticing deal. 

4. Save for Emergency Situations

One of the most common reasons why you may fall into debt is a lack of planning. Emergencies do not come knocking on your door. Being unprepared for these unexpected challenges can put you under financial strain, causing you to ultimately resort to borrowing. 

For instance, a sudden pet medical emergency may require you to cover a substantial medical expense. In such situations, you will likely need to borrow or take out a loan. 

These financial options typically come with a huge interest rate, sending you further into the debt cycle. Therefore, it is necessary to set your emergency finances aside without falling further into debt. 

Adult medical emergencies, on the other hand, may demand a significant amount of money, often exceeding the savings, credit card advances, or other options. In some cases, insurance may not cover all the expenses. As a last resort, if you are planning to sell your home immediately, you might be sceptical about the return value. Nevertheless, you can approach Signature Properties or similar such companies which liquidate homes in an all-cash deal. Additionally, they might save you from listing commissions, while also buying as-is homes. This may help to cover up timely medical charges without the need of debt.

5. Seek Professional Help

If you’re struggling to break out of the debt cycle, consider seeking help from professionals who can provide guidance on managing your finances. Working with experts, such as strategic planning consultants, can help you develop a clear roadmap for financial stability, offering insights into budgeting, long-term goal setting, and prioritizing debt repayment.

This kind of support can make a significant difference, especially if you’re feeling overwhelmed or unsure about where to start.

To Sum It Up 

If you find yourself currently living in debt, it’s essential to recognise that there is hope. Strategic planning and disciplined financial practices can help you regain control of your financial situation.

Keep in mind that breaking free from debt is a gradual process that requires commitment and patience. Celebrate small victories along the way, and stay focused on your long-term financial goals.