From a societal perspective, the level of household debt in the UK remains a significant concern.
After all, British households owed a combined total of £428 billion during the third quarter of last year, with this equivalent to a hefty £15,385 per individual home. The average debt per household also increased by more than £800 during 2018, as families in the UK become increasingly reliant on savings and borrowing to make ends meet.
In order to combat this and build towards a brighter financial future, it’s up to each individual household to take charge of their bills and ensure that they’re repaid in full and on-time. Below, we’ll offer some tips on how you can achieve this challenging objective.
1. Customise Due Dates
As you continue to open new accounts over time, you may find that you have household bills due throughout the month.
This can make it difficult to repay these and manage your finances effectively, particularly if you have bills due in the run-up to payday.
You can assume control of this situation by liaising directly with your creditors and adjusting individual due dates, in order to suit your individual financial circumstances and the date of your monthly pay check.
As a general rule, we’d recommend aligning your bills and their due dates where possible, so that they fall within a relatively short window. This makes recurring bills far easier to manage over time, especially, if you schedule your repayments to fall on date that closely follows the receipt of your monthly income.
2. Keep your Bills in One Place (and Reduce non-essential Spending Where Possible)
On a similar note, you may receive your bills through a mix of different channels, including email and direct mail.
This can make it harder than it needs to be to manage your household debt burden, while it certainly creates challenges in terms of accessing account data quickly and efficiently.
To remain organised, we’d recommend standardising the way in which you receive bills and then creating a single file or space in which these can be stored. Whether this is an online folder for emailed bills or a binder for paper documents, it provides a single and accessible place that simplifies the process of managing your finances in real-time.
As an aside, selecting the right type of online bank account can also help you to actively reduce the amount that you spend each and every month. A bank account that helps you cap your spending and set monthly budgets, with the information being accessible through a single platform can be extremely useful.
3. Set Up Automated Payments
If you’re like us and the answer is no, you’d be best served my establishing automated payments in the form of standing orders and direct debits.
You can set these payments up directly with creditors or through your bank, by stipulating how much is to be paid and on what date. Once this has been done for all of your household bills, you can sit back, relax, and simply check your bank statement every month to ensure that the bills have been settled.
It’s also interesting to note that some creditors will offer a small discount to customers who pay through Direct Debit, so this can even help you to make incremental savings over time.