Here's how to effectively manage your debt - according to a finance expert

by Derin Clark

Since social distancing measures were introduced in March, many households have seen their monthly incomes reduced, with some having to take on debt to survive.

For those in this situation, as long as you are able to repay the money you borrow within a reasonable time frame, using credit cards or an overdraft to get through a difficult few months should not cause you long-term financial difficulty.

Debt does become a problem when you are continuously having to use borrowed money for everyday essentials, such as food, or are struggling to make repayments. If you are in this situation, it is vital that you seek help and advice as early as possible from Citizen Advice or a free debt charity.

If you’ve found yourself having to take on debt to help get through lockdown, or want to reduce debt that you already have, these tips will help you to manage your debt.

Understanding your debts

Before taking action to manage and reduce your debts, you first need to know exactly what you owe and to who. While it can be tempting to shy away from your debts, you need to take the time to sit down and make a list of all the money you owe.

Once you have this list, you will be able to clearly see what debt you have and where you are paying the most interest. As already mentioned, if you find your debts overwhelming, there is help at hand through Citizen Advice or debt charities.