For Scots who are struggling with their finances, there are several potential solutions to resolve debts and help for budgeting properly.
While it is easy for all of us to fall into debt arrears, there are money advice courses available to help people manage their finances more effectively.
For those who are struggling with lots of debt, then there are potential solutions in the shape of a trust deed or a debt arrangement scheme; both of these are only available to people living in Scotland.
Indeed, all of us need to budget and while it’s an important life skill, it is also something most of us are not taught.
This means that many people have to learn the hard way while others will spend many years having to service interest charges and juggling debt between credit cards.
Debts become unmanageable for thousands of Scots
According to one charity, debts become unmanageable for thousands of Scots every year and they may then need to seek help and advice.
However, most of these people are not struggling with money mismanagement but with a change in their circumstances such as illness or divorce.
The charity which conducted the survey says that the average amount of debt for the people it is helping is nearly £13,000.
They say growing numbers of Scots are putting their homes at risk and choosing insolvency when they should be considering solutions such as a debt arrangement scheme.
Under a debt arrangement scheme, someone living in Scotland will be helped with a plan for repaying that will see their debt charges being frozen and their creditors being prevented legally from making demands.
Also, more importantly, their home will be safeguarded for as long as they maintain their payments under the scheme and comply with its conditions.
Consider a debt arrangement scheme to repay debts
This growing debt problem has led the Scottish government to urge more of us to not choose insolvency and instead to consider a debt arrangement scheme to repay debts.
There’s also a need, says the charity, for more people to understand how to budget effectively which is part of a first step towards their financial well-being.
To help a growing number of Scots, the charity organises budgeting courses.
One of the big attractions for these courses is that they show people how they can manage their money more effectively with a weekly allowance and encourage them to stick with it.
In addition, it is also possible for people to save, even a little bit, when they have a budget they can to.
Steps to budget finances effectively
To help Scots, the charity has put together a few simple steps that will help them to budget their finances more effectively:
- Be honest with yourself: sit down and be realistic about your finances
- Budget balancing: decide on what you want to achieve financially and how you can get there
- Use only cash: by using cash people will spend less
- Start saving: once a financial target has been decided upon, it may be saving for a summer holiday, then begin putting small amounts aside every week or month. Avoid using credit cards.
- Do not be tempted: before going shopping, make a list and be strict by sticking to it. Avoid in-store temptations.
For more help and advice about debt and budgeting help for those who are living in Scotland, then speak with the team of debt advisers at Scotland’s Trust Deed.