Take stock of your debt and get the right advice

With the New Year coming around many people are getting their New Year’s resolutions sorted out, and for many one of the major priorities will be to sort out their finances. This year has been a particularly difficult one for most households, with factors such as the global credit crunch, the recession, soaring inflation, and rising living costs impacting on the budgets of many, not to mention rising unemployment levels.

Most industry officials have predicted that next year will also be a difficult one, and for many people this means trying to get their finances sorted out so that they are in a better position to cope with the financial issues that may arise next year.

If you plan to try and sort out your finances in the coming year in order to ease the situation for yourself you can do this in a number of ways. Sorting your finances out involves more than just going through and cutting back on spending – you also need to ensure that you seek advice from the right person or agency if necessary, as after the financially turbulent year that many of us have had a lot of people may need financial advice to help them to sort their finances out.

Of course, your do need to go through your finances and check whether you can make any cutbacks, as all this can help to increase your disposable income and ease your finances. If you have a lot of debt that you are paying off then try and work out whether you can save money by switching to a cheaper lender.

For example, you may have a number of high interest credit cards with high balances on them particularly after the Christmas period, and the New Year may be the perfect time to switch these high interest balances to a 0% balance transfer credit card. If you have a range of credit cards and loans that you are repaying it may be worth considering

Finding a 0 percent balance transfer credit card or a low rate consolidation loan to wrap up your existing debts could help you to save money on a monthly basis, and if you are struggling to make ends meet each year this is a great way to try and ease the financial strain. However, you do need to bear in mind that it can be difficult to get finance in the current financial climate, so you need to be prepared for a plan B in the event that you cannot get the interest free credit card or consolidation loan that you need to reduce your outgoings.

If you have serious levels of debt and are finding it impossible to keep on top of your repayments it is worth seeking advice with regards to what sorts of solutions are available to you, as this may prove to be an effective alternative to consolidation. With debt levels on the rise in the UK there are plenty of resources that you can tap into and a variety of routes that you can consider to try and get your monthly debt repayments down and make your budgeting for 2009 more manageable.

You may find that an effective way of reducing the amount that you are paying out each month is to contact your lenders and see if they are prepared to reduce your repayments by modifying or extending your loan term. Most lenders are well aware of the financial situation that most people are in, and will be sympathetic with your situation.

However, make sure that you are able to provide the lenders with a breakdown of your income and outgoings so that they can see your situation and can make amendments to your loans and debts accordingly. By reducing your debt repayments with each creditor on a temporary or permanent basis you could ease the financial strain by reducing your repayments.

If you do not feel confident about liaising with your lenders yourself but you would like to try and reduce your debt repayments you can also speak to one of the various debt charities, debt management agencies, or even the Citizen’s Advice Bureau. These professionals will be able to advise you with regards to the best route to take, and will be able to contact your lenders on your behalf in order to get your debt repayments reduced.

In order to get the year off to a better start you should make sure that you do not simply bury your head in the sand with regards to your debts and financial commitment. You need to take action as early as possible so that you can look forward to a financially brighter 2009.