Dealing with debt: A step-by-step approach

Getting out of debt does not have to be difficult, even in your 40s.

07:55 19 December 2013

Having to cope with debt is a natural part of modern life.

Dealing with debt at any age can be difficult but can be especially hard when you reach middle age. Most people are already experiencing problems by the time they finish education.

When you are young, dealing with credit cards, cars, and even mortgages might not seem like much but when you start to reach mid-life, you start to think about other things seriously, like retirement.

Having a large amount of debt can make retirement more difficult, especially when you are faced with a reduced income. Retirement incomes are generally a lot lower than the income you receive while working. If you are barely able to pay your bills now, retiring may put you in a serious financial situation.

Luckily, there are things you can do to correct your creditworthiness.

• Step 1 – Assess Your Situation.

When dealing with debt it is important to know where you stand. This means assessing your current situation and looking at where you can make changes.

• Step 2 – Acknowledge Your Situation.

No one wants to admit that they are experiencing serious financial trouble. However if your debt is more than half your income, you are experiencing a financial strain.

• Step 3 – Implement Changes

After you have assessed your finances, you may find that there are several areas that you can cut back on your expenses. For example, if you spend £100 a month eating out, consider eating in for a few months. This will give you an extra £200 to put towards erasing your debt.

• Step 4 – Start Small

Start small; pay off those bills easiest to pay off first. This gives you more money to direct to those with high balances.