As the cost of living crisis continues to run riot across the United Kingdom, many Brits face the increasing possibility of debt.
As average household energy bills increase from £2,500 each year to £3,000 as of April, council tax and broadband bills also surge - sapping up any savings made from cutbacks in other areas.
One fan of Martin Lewis' BBC Podcast recently wrote in to the money saving buff, to share how one of his tips on debt 'really helped' and allowed her to make 'headway' in repaying balances.
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The Daily Express reports she followed his advice to focus on paying off her highest interest debts first. She said: “That really helped and also made me feel like I was making headway.
"A lot of the highest rate interest debt I had was small amounts and paid off relatively easily.”
Martin said this was a 'really important' principle for people trying to clear their debts to follow. He told listeners: “Many people, if they’ve got lots of different debts and credit cards, they just try and pay and spread it across all of them.
“The one with the highest interest rate is the one that is growing the most quickly, it’s the one you want to get rid off. This is a technique called ‘snowballing’. You focus all your spare cash at the highest interest rate debt. It may well be your overdraft because overdrafts are at 40 per cent these days.
“You pay just the minimums on everything else.”
He said once a person has paid off their highest interest debt, they should move onto the debt with the next highest rate, and so on. He said this helps minimise the impact of a person’s debts overall. The financial journalist, added: “The higher the interest, the quicker it grows, the more it’s going to hurt you, so get rid of the costliest first.
“And of course, if you can move it by balance transfers with new cards or existing cards, where it’s cheaper, then that’s going to help you even more.”
He also read out a message from a woman called Maxine, who listened to one of his shows and started to get serious about clearing her debts. She said her first move was to get rid of her debt company, which was charging her £50 a month but did 'nothing to help'.
Maxine approached all of the companies she owed money to and asked if she could pay them directly. She said: All said yes, and we’ve been debt free for about three years.”
Dylan Jones, CEO of Income and Expenditure Hub, previously told Express.co.uk they had seen an increase in people seeking help with managing their finances. He said: “We're already seeing many people come to us for help - the biggest increase are those who are in the 18 to 25 age group.
“Already we know that people are in debt by £200 every month, after all bills have been paid. This is set to spiral and we're anticipating a tsunami of debt from every direction as the cumulative figures increase month on month.”
Mr Jones said there are many things people can do to ensure they are in the “best financial shape” ahead of the April bills hike. He explained the process of how to do this, saying: “Firstly, start to look at all income and expenditure and where possible, cut out any unnecessary spending and subscriptions.
“Next, if you're able to crush any outstanding debt on credit cards so you're not paying additional interest that would be a sensible move. Finally, look at your biggest expenses and try to chip away at that debt as fast as you can. A simple way to do this is via our Hub, where you can see your financial position very quickly and begin to make a plan.
“This will also help you identify which priority debts you should be paying off first. It will also identify whether you could qualify for additional benefit income.”
The Martin Lewis Podcast is available on Wednesdays at BBC Sounds.
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