Expert Answers: How do I stop spending and clear my debts?
Although I try to get my spending under control, I'm still at maximum on my credit cards. Yet when I have money I spend it rather than pay off my debts. My boyfriend says he isn't prepared to spend the rest of his life with me unless I sort myself out.
Bills are a fact of life; they only become a problem when you become overcommitted and your income can no longer meet the bills coming in. However, by careful budgeting and planning and by being realistic about what you can afford, you can avoid debt problems and make the most of your income.
Over-commitment
It is easy to become overcommitted; every time you sign up for a new service (for example, cable TV, gym membership, or a mobile phone contract), buy something on hire purchase or add to a credit card debt, you add to your monthly commitments.
Changes in circumstance
Another reason for over-commitment may be a change in personal circumstances that leads to a drop in income – for example, if you lost your job, had an accident that meant you had to stop work or separated from your partner.
Any of these events could cause a drop in income and mean that you have to change your spending priorities. If something unexpected does happen, it's important to review your budget as soon as you can.
Budgeting
A personal budget can help you to plan ahead and make the most of your money. You'll need to:
Identify your commitments (for example, mortgage, rent, bills).
Work out how much they cost.
Work out where the money comes from to pay for them.
It's important to review your budget regularly, because your circumstances are likely to change.
Priorities and plans
By working out a budget you'll know how much money you have for essential living expenses (for example, household bills, rent or mortgage and food) and how much you can afford to commit to other plans (for example, buying a car, taking out a mortgage, going on holiday or saving for the future).
By prioritising your commitments you can make sure your basic needs are met and then you can decide what else you can afford, and what you may have to save for or do without.
If you are over-committed and have a debt problem, don't ignore the situation, it will only get worse.
Signs you may have a problem include:
Having rent or mortgage arrears.
Taking out new loans to pay off old ones.
Only paying the minimum amount on your credit card each month.
Ignoring letters from creditors
By listing and prioritising your debts, budgeting and then talking to your
creditors you can get this situation under control
once again.
If you have any debt problems, call National Debtline free on: 0808 808 4000.
Paul Charlson
GP from Brough
This is a common problem. There are many reasons people buy things other than necessity. It can be addictive and some people get a buzz out of buying new things which makes them feel good. I suspect you are one of these people and you should try to see it as a form of addiction which needs addressing. There are organisations such as www.shopaholicsanonymous.org and www.debtorsanonymous.org.uk which can help and I suggest that you seek out some help with this quickly. The other options are counselling or hypnotherapy or a combination of help. Talk to your boyfriend and tell him you are seeking help and I am sure he will be supportive.
Elaine Douglas
A chartered psychologist who specialises in family and child relationships
I suspect that you know that your spending habits have been out of control for some time, but now you have been given an ultimatum by your boyfriend and that seems to have given you the impetus to want to do something about this problem. I would advise that you find a good financial adviser who can help you to look at your income and expenditure. This will show you exactly what your financial position is, and where you are heading if you don't put the brakes on. I feel you also need some professional help. You need to understand why you feel the need to buy things. Your first port of call could be your GP to get a referral to an addiction specialist. If you don't want to go down this route then contact the British Psychological Society or British Association of Counselling to find out who is available in your area. You may be doing this so that you do not lose your boyfriend, but you need to do this for yourself. It will not go away without action and will only get worse.
Cary Cooper
Professor of Organisational Psychology and Health at Lancaster University
There are several answers to this question. First, it is obvious that you need some sound financial advice and support. You need immediately to find someone who can help you organise your situation as a matter of urgency, before you get into further debt and ultimately stress your relationship.
Second, you need to explore, at a behavioural level, why you have the need to constantly spend. Do you spend money on socialising, by frequently going out to eat or drink with friends, do you overspend on clothes, are you constantly buying luxury goods, etc? Identifying what you spend your money on may help you think through why you may be doing this and how you can control this behaviour in the future. If you do this as a means of socialising with friends, you will need to change your behaviour to find other less expense ways of socialising. It seems as if this relationship is very important to you, so get some help and then make the changes you need to make to ensure the future is less financially problematic.
Dr Carol Burniston
Consultant Clinical Child Psychologist
You can obtain debt advice from the Citizens' Advice Bureau, but it sounds as if you are aware of your difficulties and may be using spending as a way of making yourself feel better about other issues. Your boyfriend is right to be concerned because if you formalise your relationship, your finances may become more inter-related and your difficulties may become his shared responsibility. I would advise destroying or returning your credit cards and allowing yourself a small weekly amount of spending money. Writing down what you spend and when can sometimes give you a useful insight into where you money goes and how much of it you could save by only spending on essentials.
The other immediate task is to develop some understanding of why you spend in the way you do. Do you have issues with self-esteem, stress or unhappy personal circumstances? If these issues apply, then your doctor can refer you to a specialist psychotherapeutic service.
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