Having spiralling, out of control debt can cause a significant amount of stress and according to the Financial Advice Working Group for HM Treasury and the Financial Conduct Authority ‘Financial stress costs the UK economy £121 billion and 18 million working hours in time off work each year.’
On top of the cost to the economy, one in four workers say they have lost sleep over money worries, with poor sleep contributing to reduced concentration and quality of performance which is why Wave Community Bank is working to help take the stress out of managing your money and giving you tips on how to pay off your debts.
If you are feeling stressed because you’re juggline too many debts then the first thing for you to do is be realistic about the debts you have. Use the budget sheet contained in the Wave Money Guide to list all of the money that you owe.
Next you can decide which way you would prefer to pay off these debts. There are 2 main ways, either the Snowball Method which is where you build momentum by paying off your smallest debt first then use the money you were contributing to the smallest debt to help you pay off the second smallest and so on. With this method, you experience a few small win moments which help motivate you to continue.
The other alternative is the Avalanche Method which is where you pay the minimum balance on all of your debts and put the rest of the money you have available to pay towards the debt with the highest interest as that one is costing you the most and once that is paid off you move onto the debt with the next second highest interest rate.
You can read more about these two methods in our Wave Money Guide which you can download here. It doesn’t matter how you pay off your debts – just as long as you do as you will no doubt find that you are a little less stressed about your money worries and can enjoy the benefits of a debt-free life.
You might be able to pay off your debts quicker and with less interest by switching to a single loan. You can to talk to us about our Ethical Debt Consolidation Loans as they can help you to pay off your debts quicker and start saving so you are a bit more prepared in the future for any of life’s emergencies.
Remember, if your debt is becoming a problem, the sooner your speak to a professional debt advisor the sooner you can start managing your debt. Visit our debt advice page for link to advisors who can help.
