No one gets into debt because they want to. Debt is never an aim; it comes from spending money you don’t have. However good or bad your reason for doing that, getting a disciplined handle on your spending patterns is a must; this entire site is dedicated to saving money on everything and anything, and how to cut back where needed.

That’s why in this guide, my prime focus is on cutting the cost of your debts themselves, rather than looking at the bigger picture of all spending.

If you’re wondering how bad your debts are, as the old adage says, size isn’t everything. Even if your debt is manageable, one big danger signal is not knowing where it came from. If you didn’t ‘buy a car or a conservatory’, but have simply used credit cards or loans to fill the gap from continually spending more than you earn - that’s a major problem. If you continue to do this, more of your income will go to service the debts, leaving you borrowing more and more and creating a debt spiral.

Never borrow more to get out of debt

Traditional debt advice says ‘never borrow your way out of a debt problem’. Yet this ignores the varying cost of different debts. A more savvy approach is “never borrow more to get out of a debt problem.”

If it’s possible to borrow more cheaply elsewhere to replace existing borrowing, then this can provide a huge boost, as lower interest rates mean more of your cash goes towards repaying the actual debt rather than just servicing the interest. Those with big debts may save thousands a year in interest by being more savvy with their borrowing.

Communicate with your lender

It’s very important to get on top of debts as soon as possible. Don’t default or miss payments. Let your lender know if you’re going to be unable to pay; it’s always better to talk to them, though of course preventative measures such as reducing interest, expenditure, and being a smart consumer are the best form of action.