Rethinking debt

When it comes to money, debt is a topic many people avoid. But we’re here to tell you it doesn’t have to be scary or overwhelming. Understanding that not all debt is the same can help you take control of your finances, instead of letting them control you.

High-interest vs low-interest rates

The first thing to remember is that types of borrowing isn’t one size fits all. High-interest credit, such as credit cards or payday loans, can grow quickly if not managed properly. These types of borrowing often don’t have a clear end date and can become expensive over time.

Low-interest credit, such as a mortgage or certain personal loans, is usually used to help fund big life goals or larger purchases. These tend to come with a lower interest rate and a pre-agreed end date, making them easier to plan around.

Building your plan of action

If you have several forms of credit, or bills, it can be difficult to know where to start. Creating a clear payment plan can bring structure, confidence, and peace of mind.

Begin by listing all your creditors, their interest rates, and your monthly payments. From there, you can focus on paying off higher-interest credit first, while keeping up with essential payments on lower-interest ones.

You can use our debt consolidation calculator to get a clear picture of your repayments by clicking here.

You can also use the MoneyHelper Budget Planner to better understand your income and outgoings.

Strategic thinking matters

Rethinking finance isn’t just about paying less. It’s about understanding your overall financial strategy. By looking at which debts are costing you the most, where you could save money, and what small steps you can take now, you can improve your financial wellbeing over the year ahead.

When you approach debt in a smarter way, it becomes a tool rather than a worry. Whether it’s improving cash flow, reducing interest, or feeling more in control, a thoughtful approach can make a real difference.

Take control today

Remember, your financial situation doesn’t define you, your approach to it does. With the right plan in place, you can turn financial stress into a stepping stone towards a stronger, more confident future.