Debt Diaries: Become Debt Free in Ten Steps - Step Ten - Frequently Evaluate Your Situation
Ensuring that your debts remain under control is a task which requires a pro-active approach. It is usually the case that your financial circumstances will change as time goes by. These changes will have a knock-on effect with your personal budget. To ensure that the arrangements with your creditors do not fail it is vital to ensure that you frequently revise your income and expenditure so that you can adapt. At the moment fuel costs are slowly increasing, this places additional pressure on your outgoings and could mean that you have less surplus to offer to your creditors. So long as you stick to a realistic budget and stick to the advice given in previous blog posts you should be able to amend your offers according to the changes in your circumstances.
If there is an ongoing likelihood that your financial circumstances will fluctuate significantly you should always choose an informal method to deal with your debts – such as the self-negotiation route or a debt management plan. The key issue with choosing one of the more formal and finite options such as an Individual Voluntary Arrangement is that they could fail – which could put you in a worse position than when it began. Those that are the best at dealing with their debts are the ones who are constantly keeping an eye on their budget as if it was an organic entity. You should not be afraid to contact your creditors to alert them of any changes, they will appreciate you keeping a close eye on your situation.
Creditors will often contact you every now and then to see if you have had a change in your financial circumstances, even if things are precisely the same as before you should still send a budget to them to show them that this is the case. Although managing debts in this way can sometimes be a little repetitive it should prevent any further action from being taken against you. The key to effective debt management is to set realistic goals and to assess them from time to time, once you have got the approach sorted you’ll notice the light at the end of the tunnel will start to get bigger and bigger.
The ten steps is only the beginning of this blog, please keep an eye on it as we’ll be expanding it and will also cover various specifics over the next few months!