How to Manage Your Debts

17
August

If you are struggling to make ends meet, it can be tough enough just to get this month’s bills all paid, let alone managing your debts. Falling behind on your debt payments can damage your credit rating. Your creditors will also tack on late fees and other penalties, making the amount you owe even higher. That is why it is so important to stay on top of things and keep your debts under control. Here are five tips to help you manage your debts.

1. Make a list of all your debts and set up a monthly budget

The most important thing you can do to help manage your debt is to set up a monthly payment schedule and stick to it. Make a list of all of your debts along with your regular monthly expenses. You need to make sure your list includes amounts owed, monthly payment amounts and due dates.

Set up a monthly budget. If your monthly income is not enough to pay for all your expenses and debt payments, there are several things you can do. First, look to see where you can save money. For example, if you eat out for lunch every day, try packing a lunch instead. Once you have cut out unnecessary expenses, if you are still short you can contact your creditors and try to negotiate for lower payments. It is very important to balance your budget and not accumulate any more debt.

2. Once you have set up a payment schedule and monthly budget, write your bills on a monthly calendar

Having a visual reminder of when all your bills are due can help you keep track of when each bill needs to be paid. Keep track of when you are paid as well, and set aside times to pay your bills. You can also set up alerts on your phone or computer to remind you to pay bills.

3. Make every effort to pay your bills on time every month

It’s very important to pay bills by the due date each month. Late payments can negatively impact your credit rating and result in late fees. In addition to consulting your monthly calendar, you can also set up automatic payments where bills are paid directly from your checking account. This will help to ensure bills are paid on time.

4. Pay the minimum amount owed at the very least

Making minimum payments is a very slow way to pay off your debts. However, it will help to prevent your debts from continuing to grow and help with your credit rating. If you can’t make all of your minimum payments, be sure to contact your creditors and negotiate for lower payments. Another option is to consult with a credit counseling or debt consolidation service to consolidate your debts into one payment or lower payments than what you have currently.

5. Prioritize your debts

Once you have your debts and budget under control, it’s time to make a plan for how you will pay off your debts. There are two major methods you can use. The first method is to pay extra on the debt that carries the highest interest rate. The second method is to pay off the debt with the lowest balance first. Then when that debt is paid off you can use the money you were sending to the first debt to the next highest balance. What is most important is to have a plan and stick to it. Start with not accumulating any additional debt and then when you can, start paying more than the minimum payment on at least one of your debts. If done consistently, these two acts can help you to become debt free. It’s all all about managing your debts wisely.

This post was written by

jason – who has written posts on Budget Clowns.
Father of three and married to a lovely women. Always looking for ways to save money, and invest it properly for my children's future.

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