If you’re in debt, you’re not alone and the good news is that one way or another you can get out of it.  Here are three tips.

Get to grips with budgeting

You get into debt when you spend more than you earn so the first step in getting out of debt is learning to live within your means.  For those on variable incomes, this means the minimum you are guaranteed to have rather than the maximum you hope to have or even what you realistically expect to get.  There are three keys to budgeting:

1 – Being honest about the difference between needs and wants

2 – Making sure you get the best deal for whatever you buy

3 – Making sure you have money ready for your current and future needs, even if it means sacrificing your wants

As you can see, the theory is quite simple, but like everything else in life, it can take a bit of practice, for which read trial and error, before applying the theory to everyday life becomes second nature.  For example, it can be very easy to persuade yourself that the supermarket payments you see on your bank statement are all necessary purchases, but the reality is that supermarkets are full of discretionary items, precisely because they know how easy they make it just to slip these items into your trolley and have them pass unnoticed in the overall bill.

Look for ways to increase your income

Much advice on getting out of debt focuses on controlling your spending and certainly learning to be thrifty and budget well are arguably great life skills.  At the same time, however, the fact is that the more money you have to put towards your debts, the quicker you will pay them off, so it’s unlikely to hurt to see if there are ways you can increase your income, even if it means you have to start filing a self-assessment tax return.  These are utterly tedious, but if you simply have a bit of extra income from a “side hustle” then they are also very straightforward.  These days, there are quite a few opportunities for earning some extra income in the “gig economy”, even if you live in a remote area, there are online crowd-working sites or places where you can sell your skills in an online marketplace.  This sort of work is not necessarily ideal as a main income or likely to make you rich, but even after tax (and NI if relevant), it can help you get out of debt more quickly.

Manage your debts astutely

Getting out of debt as quickly as possible means putting as much as possible towards the repayment of the actual debt and as little as possible towards the costs of financing it.  The better your credit record, the better deals you are likely to be offered so you should make it a priority to do everything you can to keep your credit record sparkling clean.  In particular, make sure you actually close off any credit cards once you have paid off the balance rather than just leaving them lying unused.  Of course, having a great credit record is only a starting point, it’s up to you to look at ways to make that great credit record work for you.  This involves a bit of a balancing act since, on the one hand, you will want to keep your eyes open for the best deals and on the other hand you will want to avoid making too many “hard searches” on your credit record as this makes it obvious you are looking for financing and lenders can see these searches as a red flag that you may be in financial difficulties.  Therefore do as much research as possible before you make an application so you are confident you have a good chance of being accepted for the product.

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