It’s common knowledge that there’s a link between being in debt and having mental-health issues. That knowledge does not, however, necessarily make it any easier. The good news is that there are steps you can take to keep yourself calm while dealing with debt. Here are some tips to help.
Decide if you need to see a GP
This is a decision only you can make. The only real guideline is that if you are in any doubt, you should err on the side of caution. Getting a medical diagnosis may also qualify you for further help. For example, the government’s new “breathing space” initiative has separate rules for people dealing with mental-health issues.
If you don’t feel you need to see a GP, you can still look for support from other sources. These may include charities. Be aware, however, that pressure on these services can be high. This means that you could be looking at a long wait for help.
If you would like to try self-help options first, there are a lot of resources available online. Just keep in mind that you may have to experiment a bit to find the approaches which work for you. Give different approaches a fair trial but have the confidence to move on and try something else if you find that they’re not working for you.
Decide if you need to see a debt counsellor
Similar comments apply to seeing a debt counsellor. There is a slight twist here in that there are paid-for debt-counselling services. These generally provide identical services to their free counterparts. They can, however, often be accessed more quickly. Again, charities often have to deal with long waiting lists, especially now.
You may need a referral to some form of debt counselling to access certain kinds of support. For example, the breathing space initiative is only available upon referral. Even when working with a debt counsellor is not, strictly, necessary, it may make life easier. For example, professional debt counsellors may have a better idea of how to approach creditors.
That said, just about anything a debt counsellor can do, you can do yourself, possibly with some help from online resources. Here are some tips to help.
Start by sorting out a realistic budget
A realistic budget gives you enough money to live on comfortably while still making the minimum payments on your debts. Comfortably means that you cover basic necessities such as rent/mortgage, regular utilities/insurance, groceries, clothing/personal items and necessary transport. It does not necessarily mean you have money left over for non-essentials.
If you can’t cover your basic expenses and make the minimum payments on your debts, then you are insolvent. That means you need to see a debt counsellor to find a way forward. This doesn’t have to mean going bankrupt. It may do but this should be seen as a last resort rather than a go-to option.
Try to put away some savings
If you have any money left over after necessities and debt repayments then you are not just solvent, you have disposable income. It’s up to you to use it wisely. You may be tempted to put all the money you can spare towards paying off your debts. This isn’t necessarily bad. It is, however, risky.
If your credit gets cut off, for example, your credit card is suspended, you may find yourself with no savings and no access to credit. For this reason, it can be safer to build up some cash savings. These can also save you from missing payments if anything happens to your cash flow.
Aim to increase your income
Realistically, there is a limit to how many ways you can save money. It can therefore be helpful to tackle your debt issue at both ends, so to speak, by also looking at ways to increase your income.
For help and advice, please get in touch