Debt can happen to anyone
Naomi Darling, MyBnk
This week is Debt Awareness Week, led by the debt advice charity StepChange and this year’s theme explores what debt advice is available and where you can find it. Debt can happen to anyone and knowledge of how to start tackling it can literally turn things around, especially if you’re facing debt for the first time.
Anyone can fall into problem debt, and the current economic climate makes this even more likely. However, research from the National Debt Helpline shows 39% of their callers wait a year or more before seeking advice about their debts and 28% wait two years or more. This may be due to a lack of awareness of the help available, or due to feelings of shame or embarrassment.
Working with MyBnk, our aim is to help improve the financial stability of young people and so we’re sharing some of their top tips to cope with the stress that comes with debt, as well as some preventive measures to avoid borrowing more than you can afford to in the future.
1. Don’t be afraid to talk about it.
People can feel ashamed about being in debt and have a stereotype in their minds of what being in debt looks like, but it can happen to anyone! In fact, people in the UK owed £1,832.8 billion at the end of December 2022, so you’re definitely not alone. Just talking to your loved ones, friends or family can help reduce your stress and be a great first step towards clearing your debt.
2. Adjust your budget.
See if you can make any changes to your current spending. Look at what non-essentials you are buying and what you can cut out. Going without things like treats, new clothes or holidays for a while may seem difficult, but temporary cutbacks could lead to permanent positive changes. If you don’t budget, take the first step now.
3. Review and prioritise what to pay first.
If you have multiple debts, consider which ones have more severe consequences, like eviction or imprisonment, if left unpaid. Make sure you also know the interest on each of your debts so that you know which ones will get bigger faster if left unpaid. You can use this information to work out which debts you should prioritise.
4. Don’t keep borrowing.
Once you’re in a certain amount of debt, it can feel like you’ll never be able to pay it back, so many people keep borrowing to fund their lifestyles. However, it will only become harder to clear your debt if you keep adding to it. Even borrowing money to clear other debts may just mean your debt is bigger in the long run if the interest rates are higher on the new debt.
5. Reach out to experts.
There are lots of brilliant resources out there to help with debt. The Citizens Advice Bureau, StepChange and National Debtline all offer free and confidential advice and support on debt.
MyBnk also have some free resources focused on debt on the young person area of our website. And 16–25 year olds living in Scotland, the Midlands and London can book onto a fully funded money management course covering a range of survival money skills, including debt and borrowing.
Email TMH@mybnk.org to find out more.
