Financial Management and Debt Advice

On this page we acknowledge the challenges of financial management and budgeting in this modern age and provide some useful financial management and debt advice detailing the best support centers and advice on money management we have come across.

We learned in school that a human’s basic need is food, clothing and shelter, but in life, the common denominator of all these is money. We find ourselves in need of money to buy our food, clothes and provide a place to stay. Further to these basic needs, the commercial world entices us through advertising to spend our money on many other things, often leaving us in a place of continued challenge as we workout what we can and cannot afford (of which we will refer to as money management or  budgeting). After all money does not grow on trees! The advance in technology and automatic bank payments, has left many of us in a place where our actual financial position is hard to track, making  budgeting and money management even harder to manage. It is not surprising therefore that people are ending up in debt (where their outgoings are more than their income or available funds), as it often only takes a slight change in spending habits or a change in life circumstances to cause an imbalance, creating more of a need for good  financial management and debt advice.

What to look for when seeking good debt advice

When using a company or other third party to support with budgeting, remember the below points:

  • Check that debt solutions is their main business and not just a small add on. (Confirm they have a number of years’ successful trading history and be aware of anyone making ambitious claims if they have only been operating a short time). Look however for a long strong track record of debt adjustment.

  • Ask the provider to quote their success rates in negotiating the interest & charges of frozen debt and the average retention on debt solutions (Be cautious of those that ‘guarantee’ to get interest & charges frozen or high levels of debt written off)

  • Ensure they offer a full range of debt solutions including: Debt Management Plans (DMPs), Bankruptcy Assistance, Individual Voluntary Arrangements (IVAs) and Protected Trust Deeds if located in Scotland, UK.

  • Always check the initial debt advice is provided free of charge, without any obligation and available at a time to suit you.

  • Ensure that an in depth review of your financial affairs is undertaken, before a debt solution is discussed. Look for reassurance that your preference and best interests are their priority (be wary of any that offer a quick ‘fact find’ particularly if conducted over the phone)

  • Check that the service will be for the lifetime of your debt solution and not just at the beginning.

  • If the third Party is going to collect monies and pay people on your behalf, ensure that they offer a wide range of payment methods and allow you to make just one, affordable monthly payment, checking that that is promptly disbursed to each creditor. (Establish how you will be kept informed of the disbursement of payments and any important correspondence throughout the lifetime of your debt solution, including statement of your account and a diary of activity)

  • Ask if regular reviews will be held and how regularly these will be. (You would at least expect a yearly review, with the opportunity to call a review should your circumstances change)

  • Establish if you are allocated a personal account or case manager, or who to call or email if you need to contact them.

  • Where circumstance permit and funds allow, ask if they would be able to help with or handle the negotiations of full and final settlements with any creditors.

  • Ask if they offer any additional services that will assist you in regaining control of your finances as your capacity increases. These could be things such as income optimisation (including any benefit entitlements), legal support services (dealing with solicitors letters, CCJs etc), selecting better bank accounts (without penalty charges), utility switching services and reviewing of your critical insurances to ensure that you are properly protected with the lowest premium.

Always remember that the sustainability of a repayment arrangement is crucial to the success of any money management and debt solution plan. So do not feel pressured into something that you honestly do not feel you can genuinely afford.

Self help practical steps to help with money management

If you are in a position of major debt, we always advise getting professional help. Be completely honest with your family or close friends and not to try and hide the debt. We do understand however that you may want to start tackling some of the debt yourself, if you feel able, so have come up with some useful pointers and guidance below.

There may be others of you that may also feel that they want to use these steps to help put better measures in place to ensure good financial management, providing you a better understanding of your financial position.

Five self-help stages to better financial management

1. Stage one: List your income and expenditure

Look at what money you have coming in (income), what money you spend each month(expenditure) and also how much you owe (your debts).  List these on a simple sheet or spreadsheet so you can clearly see your current financial position.

2. Stage two: Make your financial statement balance

If you have more going out than coming in, you will need to priorities essential bills and money for food and try to ensure there is something left to start paying your debts.

3. Stage three: Review and determine affordable payments to your creditors

Contact your creditors to tell them your situation and your repayment offer. This shows you are serious about dealing with your debts and can often reduce the hassle you get from them.

4. Stage four: Set up your payments

It’s important to start making the affordable payments as soon as you can, as this shows your creditors that you are serious and helps you feel more on top of the situation.

5. Stage five: Stick to your budget

It’s important that you stick to your budget. It takes discipline, but it’s worth it.

Download the full PDF for more in-depth detail and guidance on these five steps!

Our Recommendation (financial management resources and debt advice centers)

As mentioned before if you are in debt and need support in helping plan your way out, then we always suggest professional support.  The best debt advice centers we have come across in the UK are the  CAP Centers, who will meet with you and help you step by step, they are a charity and offer their services free of charge.

There are also many books on this topic as suggested previously, one suggestion from us would be the Another great self-help resource is the book The Debt Doctor which is a handbook for getting out of debt and staying debt-free.

If you have found this information on debt advice useful or know someone who this could help, then please send them this URL or post it on social media. Thank you!