Get Rid of Debt

Firstly sit down and assess your income and your outgoings. This is exactly what Banks and Debt Management Companies do and its called "debt to income assessments". Don't be scared! Seeing where it money fritters away is the idea so you can then make adjustments to get rid of debt and get your credit and credit score back in the black. When you list your outgoings, split the column as per the diagram and start with the "income". Here you list all the money you receive each month, salaries, benefits, earnings, interest, dividends and any other payments etc. At the bottom of the page you can total this.

Next, take a look at your "Essential" spending, you need to include, rent, rates/council tax etc. Although you cannot get rid of these costs, can you reduce these debts at all? E.g. if you rent a house, can you bring in a lodger or share with a pal and split the costs? This will add income to your household and help with the bills. Next is "Non Essential Spending". Although it lists electricity, water and food, you need to look for ways to save on these bills and get rid of debt. We all need electricity and although some of it is essential how much do you waste with lights and Tv's left on when no one is in the room, stewing foods for hours when eating fresh vegetables steamed is quicker and healthier? Freeze surplus portions for ready meals later rather than throwing it out. Food needs splitting into necessities like milk, fruit and bread, against treats like cake, crisps, cola and other non essentials. You will be amazed how much gets wasted on food that you don't really need. You can also save when you shop with BOGOFs and using cheaper supermarkets, buy the cheaper equivalent brand rather than the expensive. Painkillers is the obvious one, several pounds for the brand leader of ibruprofen, or around 30p for the supermarket brand.

Boiling the kettle each time one person needs a drink rather than catering for everyone at once? Same goes for water, reduce your consumption! Only flush the toilet when necessary, and short flush at that time. Petrol and gas usage can be streamlined, by removing all the items out of your boot that just live there and walking for journeys that are local. With regard to credit card and loan bills, yes you have to pay them, but are they on the best apr rate, or even 0% apr credit cards if you qualify? Some loans are also at 5 or 6% apr (which you pay for each year you take the loan on for). If you do not qualify for these rates, then consolidating loans may be worth a look and pay it off quicker with these savings you are about to make. The final "Wants" column is where the rest of the savings are and should include, clothes, mobile phone, broadband, holidays, nights out, alcohol, smoking, shoes, hair dresser, manicure, gym, spa, travel, books, cds, dvds, furniture etc. Before you buy any of these purchases and get further in debt, step back, do you really absolutely need this item? Be disciplined! the answer for something like broadband may well be yes but you may not need the expensive contract you may well be on, so shop around for a better deal. This applies to all these purchases, stop wasting your money! How many times have you bought something and its still in the cupboard unused? Once you have finished, subtract your costs from your income. This figure is your savings and can be used to get rid of debts more quickly. If you seriously want to get rid of debt then you need to be tough with yourself but once you see the savings you will be amazed.