Dealing with debt

Tempting as it may be to keep hold of any redundancy payment or savings you have, interest payments on debt can cause your money pot to dwindle quickly. Consider budgeting your way out of debt and also look at ways of prioritising what you pay off.

If unemployment means you will be deeply in debt quite quickly, or if you are already deeply in debt (meaning you have debt on which you cannot keep the instalments paid and reducing month by month), it is critical to get good advice from someone who knows what they are doing. There are a lot of rip-off merchants around who will charge you a lot for debt advice, but spending money on this is wholly unnecessary. There are several charities set up to give free advice, the best known of them being National Debtline. Alternatively, consult Citizens Advice, who have some excellent online advice, or make an appointment to see them in person at your local CAB office.

Whatever you do do, don’t leave any envelopes unopened. If necessary, get someone to open them for you, and go through them with you. Another pitfall is to estimate bills. Always total them up exactly.

It also helps if you don’t feel as though you are going through this alone. There is an excellent Dealing with Debt message board, which is part of the Motley Fool financial advice site, which is well worth a look if you are really struggling with debt. There, you can share your experiences and read the stories and progress (including some inspirational success stories) of other people in a similar position.