Don’t view consolidation as the answer
Although consolidation may seem the right route it may end up a trap if you have not learned from the debt experience. Transferring overdrafts and credit cards to loans will only offer temporary solace, this is nothing more than a plaster unless you are honest about how you got into debt in the first place.
Ask for help if you need it
If your debts and other payments are too big to tackle, get debt advice help. Energy companies and banks will usually consider lower monthly repayments if you call and tell them you are struggling. Charities such as StepChange and Citizens Advice can help you check that you are claiming any benefits you are entitled to. They can also refer you to other services if you are experiencing anxiety. Delaying seeking help often makes problems worse – people often borrow to try to make ends meet and can end up in a spiral of ever more expensive borrowing as a result.
Build a buffer
Try and create an emergency fund. Advisers typically recommend aiming for three months’ earnings in an easy-access savings account, which you can use for unexpected expenses. If you can’t manage that much, any funds you can build up will be helpful. Some employers offer savings schemes where the money is redirected from your salary before you get a chance to spend it.
Understand your relationship with spending
Not everyone with financial anxiety is on the breadline – it may be that even though you are comfortably off you feel panicked about spending and tend to hoard your cash rather than using it. It is worth reflecting on why that might be. Perhaps you grew up in a family with little money and don’t want to return to that situation, or you have had a financial shock at some point, or maybe your job or relationship doesn’t feel secure. Ask yourself if having more money in the bank would make you feel better, or if the cash could be used to do things to make you feel happier or safer.