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Household debt: how can we cut back on borrowing?


Our average household debt is now about £13,000, and that’s without mortgage costs. That’s a lot of money for us to look after and pay off. In fact, with rising housing costs and inflation, it’s possibly too much for many of us.

How can we cut back on our spending? Every person’s circumstances are different, but it’s probably better to formulate some sort of plan rather than just rely on paying a bit here and there in a piecemeal basis, or relying on something turning up in a Micawber-esque vision of the future.

Knowing what we’ve borrowed

Do you truly know how much you owe? Really? When was the last time that you sat down and looked through your accounts with a fine toothcomb, and worked out exactly where everything is going each month? That doesn’t just include bills, but also subscriptions, cash withdrawals, food payments, and so on. It’s possible that you’ve got outgoings that you don’t even know about. Maybe some of your regular payments could be drastically cut if you simply buy more wisely; for example, buying larger amounts of food in one go, but using offers and coupons to cut costs.

Luxuries in moderation

At some point, unless your income increases through a new job or similar, you need to cut down on spending and divert that money towards paying off debts. But going completely ‘cold turkey’ and not spending anything on luxuries, and completely stripping back your life, almost certainly won’t work. We’re sociable creatures and want to go out, and enjoy birthdays and Christmas and gadgets and new clothes and so on. Look at diets: the best ones are always the ones that are realistic and achievable in the long-term, and that same mindset might be necessary for saving money.

Look for better options

Price comparison sites for car/home insurance, utilities such as water, gas, electricity and broadband, and anywhere else where you might be able to get a better deal (grocery shopping etc) should be utilised if you’ve not done so already. Don’t just accept a renewal price and try to be organised and diligent in researching rival prices at least a fortnight before the renewal date. If you do swap over, don’t forget to cancel your arrangement with the old provider.

Payment plans

Consolidating what you owe into one amount, preferably a zero-percent interest credit card or similar), could save you hundreds of pounds or more in interest each year. Even if you’re not saving any actual money in interest, setting up a direct debit to make a payment towards all your debts in one go rather than relying on your memory to pay off debt in several locations, is likely to save on stress and the risk of late or forgotten payments.

If you’re struggling to formulate a plan for making regular payments, contact experts for free monetary advice or go to your bank/building society and ask to speak to an advisor. They might be able to find ways of saving that you haven’t thought of, and will also help you prioritise an order of payment so that you can identify what needs to be tackled first.


About Author

Experienced journalist for more than 35 years. Managing Director of magazine publishing group with six in-house titles and on-line daily newspaper for Warrington. Experienced writer, photographer, PR consultant and media expert having written for local, regional and national newspapers. Specialties: PR, media, social networking, photographer, networking, advertising, sales, media crisis management. Patron Tim Parry Johnathan Ball Foundation for Peace. Trustee Warrington Disability Partnership. Former Chairman of Warrington Town FC.

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