The first step to becoming debt free

If you want to ditch that debt forever, it's time for you to have a "lightbulb moment".

When you’re in debt, the moment when you realise that you can’t survive without outside help is called “the lightbulb moment”. Last week we celebrated those moments - they are the first step to becoming debt free.

When people find that their debts are mounting, the understandable reaction is to resolve to pay them off. This can be through paying down the loan through budgeting (reducing expenditure and/or increasing income), or, more controversially, through debt consolidation.

When these measures fail – and sadly they can do, primarily due to life changes or shocks – the result is unmanageable debt. People can’t afford the repayments but they can’t budget further or find any more income.

Unfortunately it’s not always at this point that the lightbulb moment strikes; some people just don’t realise that they’re past the point of no return. It can take months or even years for people to realise that they need outside help, even though there’s little they can now do to improve their finances.

But when that moment of clarity hits and they actually do something about it, that’s the point at which they make their first positive step towards becoming debt free.

Mapping the debt

Last Monday we collated the data from one day’s worth of calls to our Helpline and mapped it as it happened, to see what a typical day’s worth of calls to CCCS were like, and the total debt reported.

Across 12 hours we built up a picture of debt across the country, mapping calls from Inverness in the north to Redruth in the south, from Londonderry in the west to Lowestoft in the east. You can see the map here.

The geographical range of the calls we received – 1485 in total in 12 hours – was startling to see. As we’ve said before, it’s not just those living in inner cities that suffer from debt problems and just one day’s worth of data bears this out.

More startling was the amount of debt reported. Including secured loans such as mortgages, the 1485 callers reported a total debt of £59.2m.

How to get a lightbulb moment

If you think you’re in unmanageable debt then there’s two aspects to consider. There's the financial aspect – you’ve haven’t got the money to pay back your creditors at the agreed rate. But there's also the mental side – you’d think yourself a failure if you admitted to needing help.

The first thing you need to do is sit down and find out your current situation, by producing a budget, to work out if you’ve passed the point of no return or worrying unnecessarily. Open all the statements and bills, get current balances on all your accounts, and work out your monthly expenditure.

If you feel that you have a problem then we can help. Use our online counselling service CCCS Debt Remedy or call us today. This is probably the hardest part of sorting out your debt, but take heart in the thought that you’re not alone. After all, we received 1485 calls from people in similar situations on a normal Monday last week.

If you’re confident that you can still cope then focus on maximising your income and reducing your expenditure. Whatever your situation, you can have your own lightbulb moment and take a positive first step to help yourself get out of debt.