Reduce Your Debt: A Practical Action Plan
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Reduce Your Debt

A Practical Action Plan

Reduce Your Debt: Practical Steps You Can Take

Debt can be a good thing. It can help you to buy a house, invest in your education or improve your standard of living.

However, if your level of borrowing becomes excessive it can lead to many problems, such as:

This article gives you some ideas on how you can reduce your personal debt. For business advice, see the article on how to reduce business debt at the Team Technology website.

Getting Control of Your Finances

There are four ways in which you can gain control of your finances and reduce your level of debt, or the monthly cost of your debt:

  1. Reduce what you spend

  2. Increase your income

  3. Restructure your debts (what you owe)

  4. Restructure your assets (what you own)

Here are some practical ideas to help you make improvements in each of these four areas:

1 Reduce What You Spend

To reduce what you spend:

Cut down, or cut out, as many items in category 3 as possible. If your level of debt is very high, try also to make as many savings in category 2 as you can, eg: start car sharing in your commute to work.

Create a budget, and stick to it.

2 Increase Your Income

To increase your income:

3 Restructure your debts

To reduce your debts and repayments:

Make sure you can afford new loans by producing a budget (and sticking to it!).

4 Restructure Your Assets

'Assets' are all the things you own. You can reduce the cost of your debt by:

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