| Dealing
with Debt |
4 Months into college life and
scared to hear the rattle of bank letters coming
through your letterbox? You probably aren’t the
only one! Make it easy on yourself, have a look at
this
lot..
Before you blow a fuse, sit yourself down and have
a nice cuppa. There. Better? First rule of debt is
not to panic!
You can’t deal with debts efficiently if you are
in a state of distress. We’ve been there, we
know how it feels.
Make a log
Feeling calm? Good. It’s time to have a look
at income and expenditure. This way you can see where
the
shortfall
is, and you can identify areas where you can save cash.
Get a file or a notebook, and write down where every penny
you spend goes. EVERYTHING. Do it for a whole month to
get a detailed picture, and you can see where your lolly
is disappearing to.
When you start this, write to your bank manager (and
any other debtors likely to send the boys round to
remove your
cd collection) telling them you are analysing your
finances and will contact them to outline your plans
in due course – 6
weeks should do it. By then you should have been able
to properly assess your finances and can give a realistic
plan for a repayment schedule. This will buy you valuable
time, and work to your favour should things turn nasty
later and you end up in court.
Now you know where it's all going...
Ok, so now fast forward one month.
You should now have a record of where your cash goes.
Time to make some decisions: this is necessary as you
are going
to be in the red by an average of about £4000 per
year at the current rate. Yep, that's about £80 a
week. Or £11 a day. Scary, No?
Next thing to do is work out your income for the next six
months or year. Or whatever period you choose. This will
almost certainly be less than your expenditure figure.
Now, this is really obvious I know, but subtract one
from the other and you've got the amount you've got
to make
up. If you are lucky your loan will cover the amount
and you can get back to enjoying life. If not then
read on…
In another exercise in stating the obvious there are two
ways to do this. Either cut your expenditure or raise your
income. Both of which are covered in more detail by another
article on the site.
Deal with it
Once you have worked out where you are, go and talk
to your bank manager and any other debtors. Tell
them what
your situation is and explain how and when you are
going to pay back the cash you owe them. They'll
be more helpful
if you have gone through the processes earlier in
this piece. Don't forget that they are there to sell
their products
and you might get a better rate elsewhere, especially
if you choose to go down the path of loan consolidation.
If you still need further help or can't sort out
your income and expenditure, go to your local Citizens
Advice Bureau,
who will have free debt counsellors to help you out.
They're quite friendly people really, honest.
And when you've done all that a celebratory cup of
tea using the week old tea bag is in order.
Good luck! |
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