Debt Advice

This edition of top tips is brought to you by my good friend Phil Dockerill from debtDr and are tips to avoid or get out of debt.

Tips to avoid, or at least minimise the consequences, of debt.

1) Budget - spend less than you earn. Our grandparents didn't have easy access to credit which
means they were forced to be much more organised financially than we are. So make sure you pay
for essentials first and avoid borrowing to buy extras.

2) Emergency fund - Keep at least 3 months of regular monthly expenditure aside in a savings
account that is instantly accessible and not subject to stock market risks. This avoids problems
occurring if you or your partner fall out of work or, perhaps, your children are in trouble.

3) Insurance - If you are self-employed or you have limited protection from your employer, ask a
good IFA about your options to protect you income in case of illness or accident. Ensure your family
is protected by asking about life cover while you are about it.

4) Avoid borrowing - Try not to buy things until you can afford them and if you must borrow money,
manage it very carefully. Make sure you understand how much borrowing will cost and also how you
will repay it.

5) Face financial problems - I f you find yourself unable to pay monthly bills, deal with the problem
and never borrow in order to fund existing debts, next month you will have to borrow a bit more and
it quickly spirals out of control.

6) Prioritise payments - make sure priority bills are paid first. These include mortgage or rent, council
tax, utilities and reasonable living expenses. Anything left over can be split proportionately between
your other bills.

7) Communicate with creditors - let them know your situation and what you can afford to pay
them. Do not allow yourself to be bullied or intimidated but try to come to some agreement over

8) Seek help - but make sure you choose and adviser who has your interests at heart. The "free" debt
advice services are often funded by the credit industry and often deal only with the solutions that
are better for the lenders. Do you want your debt advice to be paid for by the people you owe?

Phil Dockerill

debtDr - 01992 448808