Living in London is exciting and offers a huge number of opportunities for your career – but it can also be massively expensive. In this article, we’re looking at a few ways in which you can eliminate or reduce debt while living in the big smoke
They say that the streets of London are paved with gold but, for many, day to day life comes down to brass tacks, with a huge number of people turning to credit in order to get by. Wider issues such as the cost-of-living crisis also isn’t helping families and individuals stay on top of debt either.
As a result, many are facing issues with mounting debt which in extreme cases, is resulting in bankruptcy or the need for debt relief orders. With this in mind, we’re sharing tips on how to get on top of and possibly eliminating debt while living in London.
Work Out How Much You Spend
If you feel that your finances are spiraling out of control in the big city, the first thing you need to do is to sit down and make a list of all your major outgoings such as rent, bills and travel to work, and offset this against your earnings to see what’s left.
Next, make a list of things that you spend money on regularly such as work lunches, nights out and clothes. This will give you an idea of what you’re spending each month compared to how much money you have coming in.
How to Eliminate Debt While Living in London
Completing the calculations for your earnings and outgoings may have left you feeling slightly alarmed but, don’t worry. In this section we’re looking at ways in which you can reduce you spending to chip away at that debt:
Reduce Eating Out and Going Out Habits
When all your friends are heading out to that cool bar or trendy restaurant, it can be difficult to say no. However, nightlife in London can be astronomically expensive with the average consumer spending around £69.64 on a night out.
Try to swap the occasional night out with a night in with friends in in order to keep spending down. This can be really good fun if you provide activities and games to do with them, or even have a dinner party where everyone brings a dish to share potluck style.
If your friends are good ones, they’ll understand and be happy to make the change now and again. Similarly, if you’re in the habit of going for after-work drinks with your colleagues, it’s time to phase out this expensive habit.
Plan Your Food Shop and Drop a Brand
Grocery shopping is an essential but costly part of life, particularly at the moment. Instead of continuing the convenience of that weekly supermarket delivery, it’s time to put a bit more thought into your food shopping.
Find out what time of day your local supermarket reduces its prices and head for the bargain bin where you’ll often find plenty of items to fill up the freezer with. You might also consider trying some of your supermarket’s own brand products – while this can be a bit trial and error, often you’ll find that some of these products are just as good as your favourite big brand ones.
It’s not just your food shop you should consider making cuts with, other areas people often overpay on include phone contracts. utility bills and car insurance. Remember you can always find better deals using comparison websites and apps such as credit karma to help reduce your monthly outgoings.
Consider Taking on a Second Job
If you’ve already whittled your spending down to the bare minimum, you may want to consider taking on extra work in order to boost your earnings. If you don’t have the time or the energy to take on a part time job such as bartending or parcel delivery, you may be able to find work which you can complete from home – particularly if you have a sought-after skill such as graphic design, copywriting or data entry.
Well, you’ve always got emergency financial options like tapping into your credit card for a cash advance or seeking out payday loans from direct lenders with an even faster application process. Still, focusing on sustainable methods for budgeting is crucial.
Freelance sites such as People Per Hour and Fiverr are easy to join and can be great for bringing in a few extra pounds every week.
Consider the Benefits of a Debt Relief Order
While we’ve discussed some ways of reducing your spending and maybe earning a little extra, this may not even scratch the surface if you’ve already racked up a considerable amount of debt.
In this instance, a Debt Relief Order may be available to you. This is a solution which allows you to stop repaying debts which you cannot afford, you may be eligible if you:
- Owe less than £30,000 in total
- Have savings or valuable items worth less than £2,000 in total
- Own a vehicle worth less than £2,000 (if you were to sell it right now)
- Do not have enough money left at the end of the month to make your debt repayments
- Have lived or worked in England and Wales in the last 3 years
- Are not currently bankrupt, have an interim order or an individual voluntary arrangement
- Have not had a DRO in the last 6 years
This effectively allows you to eliminate your debt and make a fresh start with your finances.
