Debt Management Made Easy

You are feeling it already – your credit card payments take most out of your money, and just keep on piling up. If you try to compute for your credit payments, if you only pay for the minimum payment every month, it would take you more than a year just to finish off the original amount purchased plus the interests. Although it could make you feel in the short term, it definitely hurts your budget in the long run.

So how do you deal with debt management? Here are some friendly steps you could follow to cut the credit out of your payment scheme.

1. Stop swiping

The first rule of debt management is not to acquire anymore debts. This means you should stop making anymore purchases on your credit card, especially those expenses on luxury goods. It would even work to leave your credit card at home, and use it only in times of emergency.

2. Monitor your credit report

You should do this for many reasons – one, you might be spending way too much; or two, you might be having phantom expenses that you are not aware of. Your credit card company should be issuing monthly reports for you, and for a good reason. Ask the question: am I spending much more than what I earn? You might be already spending today the money you would be earning three months from now.

3. Decrease the payables

Simply put, pay your debts. It’s the simplest way to debt management. This could mean you save a bit of your everyday budget, and then use them to decrease the amount you need to pay. This also means you have to start saving money. The point is, it is useless to save money if you have a credit card debt that continues to increase with the monthly interests imposed on you. Better pay all your debt first before you could actually start saving.

4. Talk to your creditors

You will be surprised how willing they are to accommodate your concerns regarding your credit, instead of you continuously running away from their calls. Explain your situation and negotiate. Do not be afraid to point out lapses in your records and be true to your word of paying your debts on time.

5. Never pay debt with debt

You might think it’s a good idea to use your credit card to pay for your other credit cards and loans, but think again. Sure it solves the urgency of one matter, but it builds up on the interests you have to pay with another. Learn how to do debt management in both short term and long term points of view. The less risk you take, the better the chances of you getting rid of your debts.

Debt management could surely be difficult at the beginning. But aggressively putting your energies into paying your debt will pay off by taking off the worries and stress for tomorrow. It could also correct some of your spending habits and allow you to be in better control of your money.