Helpful, non-judgemental tips for dealing with debt

At a time when many of us are struggling financially, we asked Ellie Austin-Williams (aka This Girl Talks Money) for some tips on facing, and tackling, debt. 

How much do you actually know about debt? 

It’s no secret that talking about money is still considered a taboo topic in many circles, yet it’s one of the most universal things that most of us deal with during our lives. Especially when it comes to borrowing, we’re a long way from being open and honest about how much we owe the bank.

Do we really need to talk about it, you might be thinking. Well, borrowing is at an all time high and it turns out that women are being disproportionately affected by debt. Plus, having debt is very common in the UK - so much so that the average credit card debt per person is £2100. With the cost of living crisis set to continue into 2023 and an economic outlook that means we’re all feeling the pinch, it’s never been more important to get a handle on your borrowing.

So we’re bringing you some friendly tough love, to help you get your head out of the sand and finally face into debt once and for all. Here’s what you need to know.

Know your numbers

Do you have a clear idea of how much interest you’re paying on all of your different financial products? If the answer is no, you’re not alone. Most people don’t know the cost of their borrowing, yet it can have a huge impact on your financial situation.

Although the idea of checking your credit card balance might send shivers down your spine, the short term pain will lead to a long term gain when it comes to your financial health. A staggering 81% of young people feel anxious about money and with the cost of living crisis constantly in the news, it’s easy to put off taking control of your cash. Yet getting crystal clear on your finances and knowing your numbers is one of the most important things you can do for your bank balance and your peace of mind. 

Set aside time to go through all of your finances and check the balance on all and any credit cards, loans and buy now pay later accounts. That way, you’ll be able to make decisions from an informed place, rather than fear.

Don’t be afraid to ask questions

If there’s one industry that’s well known for its love of jargon and complex terms, it’s finance. Consumer credit is confusing; there are endless T&Cs, percentages galore and that’s before we even start on decoding the many acronyms. But we’re not taught about how to manage credit at school, so don’t be afraid to speak to your bank or lender to find out more information about what you owe. Plus, there are plenty of platforms and tools out there to help you make sense of the credit landscape, so don’t be afraid to ask questions and fill in any knowledge gaps you might have.

Build a plan of action

Taking the first step towards facing debt often feels like the hardest, but once you’ve got a clearer understanding of your borrowing you can put together a step by step action plan. Tempting as it might be to go in all guns blazing, making your plan manageable is key to consistency over the long term. 

Make the most of tools available to help speed up the repayment process. There are clever new financial tools such as Incredible that are helping you to take control of your credit by allowing you to track your borrowing across credit cards, buy now pay later services and student loans. The easy to use app helps you understand exactly how much you owe and how long it will take to pay it back, and helpfully suggests ways to reduce the time and cost of paying off your debt. 

Keep your motivation high

When you’re working towards a long term financial goal, one of the hardest parts can be staying motivated. It’s not always easy to stay on track when you’re paying off debt, especially in a climate of soaring inflation and rising energy bills. For some, the knowledge that they are closer to the finish line with their goal can be enough, but lots of people need a physical way to measure and track progress. If you’re nodding along reading this, try creating a debt repayment chart to stick on the wall to track your progress. That way, you can regularly see the progress and remind yourself how far you’ve come.

Seek support 

If you feel overwhelmed by debt, remember that you don’t need to deal with it alone. There are brilliant organisations such as StepChange who specialise in providing free debt advice and support. You can contact StepChange online or by phone.