UK Debt Buster Guide Step One : Identify the Problem

From previous post, debt is considered as one of the problem today in UK. This is the first step of debt buster to eliminate debt quickly.

The first step is to face up to the fact that you have a debt problem. The longer you leave it, the larger these will be and the harder it will be to get your finances back under control.

First calculate exactly how much you owe. Make a list of all your various debts and find out exactly what interest rate you are paying on different loans, credit cards, store cards, mortgages etc. This will help you identify the most expensive debts, which need to be paid off first.

It is also important to understand why you have become saddled with a debt problem. Are you in the red because you regularly spend more than your earn each month, and use credit cards and overdrafts to bridge this gap? Or maybe a one-off purchase has stretched your finances a bit too far? Perhaps a career change, divorce, unemployment or illness have reduced your income? If you know why your spending has spun out of control, you are in a better position to draw up an effective plan of action, and there is less chance of falling into the same trap again in future.

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