Developing good financial habits to tackle debt

By Mr Bankruptcy

17th February 2021

Making the changes required to take control of an unmanageable debt problem is tough. It requires a change in both spending and saving habits. However, the one thing harder to change than a habit is a belief, so if you’ve already come to the conclusion that you must bring your finances under control to deal with a debt problem then you’ve already done the hardest part.

Now you just have to adopt some new practices and turn them into habits in order to start managing your debt problem. Here are a few of those steps to help transform unhelpful spending habits into healthy ones.

First steps

The first thing to do is to be honest with yourself and decide which habits needs to change. Write down the things you do that make you spend more money than you should and then think about the impact they have on your life and your debt situation. Doing this will give you a sense of clarity over your goal and a path to reach it.

What are good spending habits?

When wanting to make a change, it’s advisable not to try to change everything at once but to pick one or two habits first before slowly building in new habits once they are established. Think about which of the following habits might have the greatest impact for you:

Deciding your spending priorities: Regularly review your spending priorities so that you spend your money on things that are most important to achieving your financial goals.
Regularly review your budget: Know your income and outgoings, spot any changes and see where you are overspending.
Set goals: These should reinforce your good spending habits and give you something to work towards.
Ask why? Before you spend, ask why you are making the purchase and whether it’s a want or need. Don’t rush into making a purchase.
Avoid visiting places that encourage you to spend more: (whether that’s websites during lockdown or going to physical shopping venues). Find somewhere to go or something to do that doesn’t expose you to the temptation to spend.
Start saving: As much as you can, start putting a percentage aside each month, gradually building a saving habit
Give yourself an allowance: Put money aside for bills and savings and give yourself an allowance to spend once you know how much you have left.

Regularly reviewing what you have available to spend and understanding what your essential outgoings are will ensure you aren’t making a debt worse. Getting into the habit of not spending everything you have each month will empower you to pay back a debt over a period. Both habits combined will allow you to start taking charge of your finances and bring an unmanaged debt back under control.

Managing your spending habits will help you gain clarity and give you a feeling of being back in control and stop you feeling overwhelmed by your debt situation. However, one additional habit you may want to change is to talk about your financial worries and seek help, either from friends and family or from a professional.

James Rosa Associates

James Rosa associates is a firm of debt advisors and debt adjustors. With a supportive, non-judgemental and friendly approach, we offer a full range of advice and professional services to individuals and business owners/directors who face unmanageable debt or who are involved in civil or commercial disputes.

Our services include:

Insolvency support
Negotiated settlements
Personal assisted bankruptcy
Mediation

We are authorised and regulated by the Financial Conduct Authority (FRN665061) to work with clients to produce bespoke solutions to fit their specific circumstances.

Find out if you qualify for a free consultation

If you want to deal with an unmanageable debt, or bring a dispute to a swift and cost-effective resolution, contact James Rosa Associates, ring 0845 6807217 or email enquiries@jamesrosa.co.uk to find out whether you qualify for a free consultation.

Please be advised that all views expressed in these posts are those of the author and not of James Rosa Associates ltd.