Review Expenditure

Good plans help you reach your goals. You will probably have to make some changes to your lifestyle if you want to beat debt. So, to help you stay motivated so that you stick to your guns this time; make a debt relief plan.

It's not a walk in the park but neither is it as horrendously dull as it sounds!

First and foremost, you will need to take a look at your last month's incomings and outgoings so that you can see where it is possible to reduce your spending and how much money you could have leftover to repay debt if you did make changes. Even if it's not much; take care of the pennies and the pounds will take care of themselves!

If you have already done this in the past and are now pulling out your hair because you know that, at best, you break even and have no spare cash at all; we have some suggestions that might help to highlight which parts of your routine are burning a hole in your pocket:

Going to the cinema

Wait until it comes out on DVD and have a film night at home.

Taking taxis

Walk – it's free and good for you too; if you walk 30 minutes a day, 5 days a week, you will burn (on average) 750 calories per week.

Going to restaurants and expensive cafes

Cook – get your mates round for dinner; it's cheaper, healthier and quite fun to practice your Jamie Oliver throws and shakes while you rustle up some pukka tukka!

Take-away coffee

Yes, it can be the highlight of your morning but that is some seriously expensive hot milk my friend! Why not buy a coffee flask for a couple of pounds and make your own at home?

Going to bars and pubs

Have a 'bring-your-own-booze' gathering round your place; there'll be cocktails all round and crawling on your hands and knees to bed is much cheaper than the cab fare home anyway!

Having cable or satellite television

How many times have you flicked through the hundreds of channels and moaned that there is NOTHING decent on? Get rid of it and then, at least you won't be paying to be bored out of your tree.

Buying branded goods instead of 'Better-Buy' goods

Because you're worth it?? Well, I'm sure you are worth it but when the chances are that 'store brand' items are made by the same 'name brand' manufacturer, it probably isn't worth it!

Decorating your house (it can wait until you are out of debt)

With all of the home-makeover programmes on tele, the temptation to spruce up your pad can be tempting but unless you are on the programme getting a freebee, the 'statement walls' and fancy lamps can get to the back of the queue.

Buying presents

Write them a poem, make them a mix tape, paint them a picture or just pretend you forgot – but for god's sake don't blow your money on expensive gifts when you can't afford it!

We are not saying that you should follow in the footsteps of Keira Knightly and get rid of your TV altogether or that you become a total detoxing recluse, but making small changes like walking to the shops instead of blowing £10 on a taxi can make a huge difference to your finances.

By totaling up how much you spend on each of the above (and similar activities) every month and therefore how much you could save if you made a few changes to your routine, you might find that you have a little more money than you thought to put towards debt repayment.

If your calculations show that your income is more than your outgoings then you are already starting to beat the debt; it will be easier to get out of debt as long as you pay it off before the interest gets the better of you (interest can build up fast and make a mess of what was a manageable situation so it's best to pay it off bit by bit).

If you keep up to date with your finances you will have a better chance at beating debt. Try to be as accurate as possible when you calculate your incomings and outgoings as you may be asked by creditors to prove that you are going to be able to pay back debt.

Although the aim of the game is to cut out luxuries that you don't really need, do not go overboard with your budget! If you under budget yourself you are more likely to break the plan and start spending again because you think that you can't beat debt. So, make sure that essentials like food, bills, car costs etc are accurately accounted for.

Try using a spreadsheet program such as Microsoft Excel to set out and keep track of your budget. If you haven't got them, don't worry - it is just as easy to do on lined paper and a calculator.

Think of this process like weeding out your financial garden . . . weeds restrict, spread quickly and block light– you need to get rid of all of the things in your life that drain your resources in order to let light infiltrate so that your money can grow rather than shrink as a result of debt.

A good way to stick to the plan you have made is to make some new rules for you and your household members to start living by so that you maintain awareness of your situation and do not lose sight of your objectives. For example:

• Turn lights off when you leave a room
• Use energy saving light bulbs
• Turn the television / radio / computer off when you are not using it - the average household could save £37 in electricity bills each year by turning appliances off and not leaving them charging unnecessarily
• Try to use the dishwasher rather than wash up by hand – it'll use half the amount of water
• Use a broom instead of a hose to clean the driveway
• UNPLUG EVERYTHING! Did you know that 95% of the energy used by the UK's mobile phone chargers is wasted energy? Only 5% is actually used to charge phones, the rest is used when the charger is plugged into the wall but not switched off at the socket

OK, I'm sure you get the message by now! Making these changes will make a difference to your monthly bills which might make it easier to make small savings now to support repayment in the long run.

If you would like more advice on debt relief plans or would like some guidance, you can ask one of our debt advisors any question you like (preferably relating to debt management) for free and receive an answer within 60 minutes – it really is as easy as it sounds and much quicker than trawling through internet pages to find an answer.

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