Help – my monthly outgoings exceed my income

March 4, 2019

It’s a worrying situation when you realise your outgoings exceed your income, and it can be difficult to prevent debt in this situation, but there are solid steps you can take to get back on track – you just need to act quickly.

Increasing your income or reducing the money going out are essentially what is needed, but it’s not always easy to do either. Working extra hours or cutting back on spending are the obvious answers, but initially it’s also important to prioritise your outgoings so you don’t put your home at risk.

How to prioritise your bills

If you consider the repercussions of not paying each bill, it becomes clear which should take priority. Your mortgage or rent payments, for example, are the highest priority as they keep a roof over your head.

Council tax, energy bills, and court fines should also be prioritised. Credit card bills and bank overdrafts are among non-priority payments, although you still need to factor them into your overall financial situation.

Increasing your income

Find out if you’re entitled to any benefits or grants

You may be entitled to state benefits such as council tax relief, working tax credit, or carer’s allowance, which could considerably increase your income each month. Check with your local council about council tax reductions, and also housing benefit if you rent from your local authority or a housing association.

Check your tax code

If you’ve been paying too much tax you’ll be entitled to a refund, which could potentially be a significant sum. You can check online whether you’re due a rebate, or contact HMRC by phone to instigate a refund if you’ve overpaid.

Earning extra money

It’s relatively easy to earn money online these days – by selling household items, clothes, or toys, for example, or completing consumer surveys online. Although this is unlikely to be a significant sum, every little helps. Alternatively, you may be able to secure some extra hours at work, or maybe a second part-time job until you get back on your feet.

Cutting costs

Scrutinise your budget

If you look through your bank and credit card statements you may find subscriptions that you no longer use, such as magazines or gym memberships. Switching energy suppliers, using one supplier for both gas and electricity, and installing a water meter, are also ways to save money.

Debt solutions in Scotland

Depending on your circumstances a formal debt solution such as the Debt Arrangement Scheme (DAS), Scottish Trust Deed, or sequestration may be the best option. The Debt Arrangement Scheme allows you to repay debts in full at an affordable rate, freezing additional interest and charges so your overall debt doesn’t increase. Scottish Trust Deeds and sequestration both write off a proportion of the debt.

Scotland Debt Solutions specialise in helping Scottish residents to escape debt, and can provide the support you need when you’re facing financial difficulty. We work from five offices around Scotland, and can offer you a free same-day meeting to quickly establish your best options.

John Baird

Insolvency Adviser

Tel: 0800 063 9250

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