When it comes to managing personal finances, December can be tricky to budget for, with the average UK household forecast to spend between £700 and £973 per head during Christmas 2023. 

Accountants are not immune to the stresses unleashed by financial concerns; in fact, caba research suggests that around 42% of accountants and ACA students are struggling financially due to the ongoing cost-of-living crisis. Of these accountants, 59% said it had led to them feeling stressed and a third admitted to being depressed.

However, the research also shows that accountants are often reluctant to discuss their financial worries due to the nature of their jobs. They’re restricted by their belief that accountants should be on top of their own finances. There’s also the notion of feeling like the only one dealing with a problem of this magnitude. These fears are some of the factors that prevent them from opening up to others.

The most important thing to remember is that you’re not alone. There is always help available. There are also numerous things that you can do to take back control of your personal finances.

Good debt vs bad debt 

Not all debt is a bad thing. A good starting point is to build your understanding of the different kinds of debt. Credit and borrowing are important for any functioning economy, and ensuring you make all your payments on time can help to improve your credit score. 

‘Bad’ or ‘unhealthy’ debt is when you’ve accumulated a level of debt that’s considered excessive or unsustainable. For example, if you’re having to borrow money to cover basic living expenses such as rent or groceries or run up a credit card bill with no clear repayment plan, this may indicate that you’ve got ‘bad’ debt. 

However, in every case ‘good’ and ‘bad’ debt are completely personal to you and your financial journey. Remember, your debt should work for you, not burden you. 

Budget wisely  

Budgeting is your best way out of debt. Track your expenses using a money management app or record them on a spreadsheet listing your income sources and your outgoing expenses to get a better understanding of your expenditures. When you do this consistently, you can quickly see where and how you can redirect money towards reducing your debt.

What’s more, it can help you to notice important trends in your spending and identify areas where you can cut back. Remember, reducing your debt requires sacrifices and making tough calls.

Drawing a budget of this type will help you develop a financial plan. You can also reach out to a financial wellbeing expert who can assist in figuring out your financial position.

Managing your finances with debt can be overwhelming, but it’s easier when you have a plan. What’s more, you don’t need to have all the answers yourself. There is so much useful guidance out there, not to mention experts who’ll help you make sense of it. All you have to do is take that first step. 

The importance of reaching out 

A problem shared is a problem halved, as the adage goes. If you have a debt problem or are experiencing any signs of financial stress, it can help to reach out to an expert or a loved one for support. Speaking to someone you trust can remind you that you’re not alone and can help you explore and articulate your different options.

At caba, our experts can support you in several ways. We have multiple self-help guides online, including a debt toolkit that is free for anyone. If you’re an ICAEW member or ACA student, we also offer free mental health support and debt advice, and can even negotiate with creditors on your behalf.

Quick tips and tricks to navigate debt: 

• Be honest about your situation including how much money you owe in total. Do you have a plan? 
• Ask for help – it will lighten the emotional burden you’re carrying and remind you that you’re not alone.
• Pay off your debts before saving money. 
• Don’t compare your situation to others.

• Take your debt seriously – don’t give in to social temptations and make sure you stick to your repayment plan. 
• Put yourself first. Your mental health is more important than a bank or creditor. 

Paul Day, expert debt adviser at caba, the occupational charity helping the ICAEW community thrive in their personal and professional lives.

• For anyone facing debt, further information, guidance and access to free tools can be found on caba’s personal finance hub.