I may be a money and consumer rights expert, but I’ve made some pretty major mistakes in my time with my own finances.

When I first moved to London, I was woefully underpaid and struggled to make it from one week to the next on the cash I had coming in. I resisted getting a credit card for a while but after two years I cracked. Before I knew it, I was £3,000 in debt.

I’ve written a lot about my battles to get out of debt over the last few years. On paper, it looks a bit depressing, because it did take a long time. But then I had racked up a huge number of debts over a decade, as I tried to say afloat.

I’ve also struggled a lot with my own mental health issues over the years – and that undoubtedly had a huge impact on not only how I felt about my debts, but how I incurred them.

We don’t like to talk about mental health problems, despite the fact that millions of people are experiencing them right now, or receiving treatment or medication. But money and mental health go hand in hand. It’s terrifyingly easy for fears about money to set off a cycle of depression and anxiety that can make it incredibly hard to climb back out of the hole you’ve fallen in to.

Even so, I was shocked to read the latest annual Financial Stability Tracker report from Creditspring which takes an in-depth look at the problem. Among the many startling facts uncovered by the research were:

  • A quarter of people said that they are currently experiencing the worst metal health wellbeing they’ve ever gone through due to money worries.
  • Three in ten people could not get the help and support they needed from the Government.
  • 45% of 25- to 34-year-olds say their mental health cannot improve while they are in debt.

I can’t promise people that there is an easy solution to these problems. But knowing how to face down your fears can go a long way towards helping you fight back against your finances.

Here’s my guide.

How to face your finances and get the help you need

First things first. If you’re in debt, it’s not your fault. Lots of things can go wrong in life, so stop blaming yourself.

It’s surprisingly common for people to go on self-destructive spending sprees during times of financial difficulty. Again, don’t beat yourself up over this. But acknowledging the problem and understanding how to get help are the first steps to seizing control of your life again.

And it starts, with making a basic budget.

The budgeting basics

In order to get help from businesses and fantastic debt charities like StepChange, you’ll need to make a (super basic) budget.

If that thought fills you with dread, you’re not alone.

I found that sitting in silence and dealing with my debts made things worse. So here’s two simple tips for you:

  • Put on the tele, the radio or some music on in the background.
  • Set a timer on your phone and don’t spend any longer that 30 minutes on the budget at first.

Ready? Okay, here we go. Take a deep breath turn on the computer or grab a pad and have a look at your bank and credit accounts. Remember that time limit. Just getting started is the most important thing.

You can download free apps, watch glossy guides on YouTube or check out lifestyle blogs from ridiculously organised people who make you feel rubbish about yourself. But budgeting is best when it’s basic. A simple spreadsheet is all you need – or a blank piece of paper.

If you have online banking, you can get a list of direct debits and standing orders with one or two clicks. List out when your regular payments are due and total up the cost, then compare it to what’s coming in. In a separate column, include things that you pay as you go, like the food shop, travel and lifestyle spending like entertainments and the occasional takeout.

You’ll be amazed how quick this is to do – however, what you’ll be left with is the amount of money you have left over each month in rather stark terms.

How to tackle the overspend

Okay, so you’ve overspent. Knowing that there’s a problem is the first step to dealing with it effectively.

If you only need a short breather to get back on top of your cash, speak to your bank to see if they can give you a temporary overdraft for a month. If you don’t meet their criteria for credit, then take some time to tell them about your situation. If you explain you’re experiencing some difficulties, your bank has an obligation to do what it can to try to help not make the situation worse. They aren’t going to write off everything you’ve spent, but they can give you a break on charges and interest until you’re back on top of things. If your bank or credit provider refuses to help you, or makes the situation worse, make a complaint to the Financial Ombudsman for free.

If you’ve got more money going out than coming in, or even if you don’t have enough left over to cover an emergency, you meet the definition of financial difficulties. That’s where the free debt charity StepChange can step in. I can’t tell you how fantastic StepChange is. They have helped millions of people tackle dire financial circumstances.

StepChange will ask you to give some financial information and will set up a tailored plan, working out what you can afford to pay each month. They then contact all your creditors on your behalf. Oh and don’t ever go to a business that charges for this or for things like IVAs or bankruptcy – StepChange is totally free.

Contact your potential creditors

If you’re worried that your household income is getting tighter or you’re struggling to stay on top of things there’s a lot you can do to tackle the problem before it gets out of control.

The rules about financial difficulties are clear. If you’re struggling to meet your financial commitments and ask the business for help, they should come up with some solutions for you to help you buy some time while you get back on your feet again. They should also consider suspending interest and charges for a short period if it’s making your situation worse. This doesn’t mean money you’ve spent will be refunded, but it does mean that money you’ve been charged on top might be refunded if there’s a good reason for doing so. Loan and credit payment holidays are available too so ask and explain if you’re struggling.

Mortgage and loan holidays buy you a bit of time to regain control of your finances but bear in mind the money you owe just gets tacked on to the end of the mortgage or loan period and extra interest may still apply.

Now that’s out of the way, let’s get some cash back

Feeling a bit more confident? Okay, let’s get some money back and make some savings. Go back 13 months through your bank statements and note down anything that you don’t recognise. I found it was easier to do this in three month chunks.

Many people are spending hundreds, if not thousands of pounds each year on sneaky annual debits for things they neither wanted nor needed. These might be free trials for goods or services you signed up to, or more obvious things, like Amazon Prime or iCloud storage. Why 13 months? Many businesses sign you up to annual payments that might have slipped under your radar. So go back a year and overlap by an extra month and you should spot everything.

Ask your bank to cancel anything you don’t want or need straight away – and claim back the money if you haven’t authorised the payments. You can dispute unauthorised transactions through your bank or card provider or take it up direct with the firm that’s debited you – it’s up to them to prove you said they could take the cash.

One step is all it takes…

Dealing with difficult decisions about your finances can seem overwhelming. But once you tackle them head on, the pressure is much less than the burden of worrying but not knowing. There is help out there – and you are not alone.

I’ll be sharing more tips and advice to help you save money and get the support you need in the coming months. But share your advice and stories too – and reach out to friends and family who might need help but don’t know how to ask.

Featured in Mirror – Martyn James


Please share me around

Share useful info with your friends