From time to time, we all get the feeling that perhaps we aren’t managing our money as well as we could be.
However, as a sole trader, things can spiral out of control quickly – so it’s important to keep a close eye on your finances at all times in order to save you from potentially tough insolvency procedures in the future.
In an insolvent situation, the sooner you seek debt support, the better. So, if you think you could do with a bit of help with your money management, read on to discover five key signs that there may be trouble ahead...
5 signs that you’re in need of debt support:
1. You aren’t sure how many debts you have
A common problem for many people is being unsure of just how much you actually owe, but this is a clear sign that you aren’t in control of your debts. Working out what you own and to whom is a great start if you want to get back on the road to financial stability. However, it can be overwhelming.
If you aren’t sure where to start, look back through your previous bank statements and make a list of what is owed to who – and if you’re struggling to make repayments or find yourself missing some altogether, it’s important to take action.
Try making a strict budget every month to get back in control, or for expert advice, seek professional help.
2. You’re paying minimum payments
Making minimum repayments on the debts you owe could mean that they will take years to pay off and will cost you considerably more in the long term. If you are unable to increase payments on money owed, you should look at budgeting appropriately and deciding on what you are able to pay.
Increasing your monthly payments will mean that you will be far better off in the future – and if you are too stretched to make bigger payments, you could also think about consolidating loans into smaller monthly amounts.
If you need advice on how to manage your debts, our expert team can provide expert debt support and advice so that you can take back control.
3. You’re going over your credit limit
The late payment of bills or exceeding your credit limits usually means that you will be stung by further charges, ultimately driving you deeper into debt.
If you find that you are regularly going over your credit limits and are struggling to keep up with additional charges, it could be a key sign that you need to start looking for insolvency guidance.
At McAlister & Co, we can help you to cut costs and manage your cash more effectively to make sure you stop exceeding your credit limits and are able to pay your bills on time so you can make additional charges a thing of the past. Contact our team today to find out more!
4. You’re withdrawing cash on your credit cards
Credit cards and cash withdrawals are not a good mix. Not only are the withdrawal charges sky high, but interest will be charged from the very moment you use the cash machine.
Using your credit card to withdraw cash is a sure-fire sign that you are struggling to manage your finances, and you should avoid doing so as much as you can.
If you do need to use your credit card, try and use it only for in-store or online purchases as the percentage will most likely be far lower than getting cash from an ATM. And of course, remember to avoid extra charges by paying off the balance every month.
5. Debt for more debt
Finally, the biggest indicator of them all and when the red warning light should start to flash is if you are getting yourself into debt to pay for debt.
At McAlister & Co, we often have people contact us after a few months of using payday loans or additional credit card charges to pay for their personal loans, and it’s an incredibly tough cycle to break.
If you are struggling to pay a loan for a month or so and it is a short-term issue, it’s much better to go and talk to your bank manager or finance provider rather than racking up more debt as you’re struggle to cope.
If you are upfront and honest, they are much more likely to be understanding of your situation and will often help you to work out a better deal for yourself than any payday loan provider ever could.
How McAlister & Co can help
Although this is a simple guide, if you are struggling with more than one of the points on this list,
If you are struggling with personal debts, there are a range of insolvency options available to help you get back on track, from debt management plans and time to pay arrangements to individual voluntary arrangements and even bankruptcy.
However, more often than not, you just need to work out a tight budget or simply get in touch with your creditors to work out an informal plan! The sooner you take action the better – so contact us today to find out more.