Debt is scary, especially when we see those big numbers pile up. Yet we can’t help but get debt, especially for unexpected circumstances. However, one thing you always have to remember is that debt can always be repaid – and you can pay them faster by managing your expenses more carefully.
Here are some key success tips on how to manage your debts more successfully.
Manage Your Records
Perhaps the first thing to do is to make a reassessment of your overall financial status. In this case, try to reassess just who you owe, and how much you owe them.
- This applies to both inside and outside debts such as your credit cards and mortgages. It is helpful to check if you owe money to other people as well.
First, make a list of all your debts. It’s up to you as to what kind of format you want to use, but you should know the creditor, the due date, the total amount, and the monthly payment. You can use your credit report to confirm and double check parts of your list. Make sure to update your list every few months when you know there are changes in the numbers.
You should also try to prioritize which bills to pay first. If you already have your records with you, try to assess which debt you can pay the fastest, and which ones would be a bit more delayed. (See this article after you finish reading this. It’s a great read if you would like to find out how to get out of debt fast, https://www.facethered.com/how-to-get-out-of-debt )
- Credit card debt is the most likely candidate for priority. You should choose the one with the highest interest rate, because this is the one that’s most likely giving the biggest numbers in your debt in the first place.
- You can try to make this list by prioritizing the ones with the biggest debt, or the ones with the lowest debt.
Create A Schedule
We all make mistakes, and sometimes we make them because we think we don’t have control over what we do everyday. This is a big mistake when it comes to managing your debt, as missing out on paying them not only damages our credit, but can also increase the debt we have. The best way to deal with this is by creating a calendar.
- You can create your own billing calendar to check which bills you have to pay for a certain month.
One good tip to managing your debt is to manage your paychecks and pay your bills with them. You won’t have to spend precious savings for your debt. Do this by taking note of how much you have to pay on certain due dates. Afterwards, fill in the date for every paycheck you have.
This is useful as you now have monthly reminders that you can actually use to take some money off your paycheck to pay your debt. You can manipulate this calendar to feature other means of payment outside your salary.
Also try to make sure your other accounts are in good standing order. You don’t have to sacrifice your positive accounts because some of your other expenses affected your credit.
Try to pay those past accounts if you have the means to.
On Time Payment Counts
You may already know this, but it’s a helpful reminder, that late payments almost always have penalties. Sometimes, it’s discouraging to pay a late debt because there’s also a late fee involved. However, the more late payments you have, the higher they get. The solution? Try to pay as much as you can. You can read more about late payments here at AAACreditGuide.com.
Can’t Pay More?
If you can’t pay more, it’s not bad to pay the bare minimum. It’s not going to make big strides towards paying your debt faster, but it helps.
If you have trouble remembering when to pay what, then it’s best to create your own scheduling system like the one explained above.
- If you want to take this one step further, utilize your gadgets’ scheduling systems in order to alert you every so often of bills you have to pay.
- Always remember to pay as early as possible, as late dues get reported to your credit bureau, and may result in bad credit.
Saving, Budgeting Helps
Sometimes, it’s best to accept as early as now that you’re not going to be able to splurge as much given your current financial status. This means planning your monthly budget carefully so you don’t get more debt.
- It’s best if you plan far enough ahead so that you can plan actions when unexpected circumstances appear.
- This also helps give you a heads up if there’s likely to be extra money to be saved when you are paying off your monthly bills.
The point of saving and budgeting is to make sure you minimize the debt you may potentially get. This is because we have to accept at this point that being in debt can be a natural part of our finances, but it’s not impossible to manage them carefully. Budgeting lets you get one step ahead in this matter.
This is likely the trickiest thing to do, but it’s not bad to have an emergency fund. When you earn your paycheck, try to dedicate a portion of it for an emergency fund.
- This can be used for emergency expenses that appear – such as sudden payments, hospital bills, and other kinds of expenses.
- Try to aim for a $1,000 emergency fund. If you’re able to achieve this, try to increase the amount inside your emergency fund.
Related: 5 Tips to Increase Your Emergency Fund
Debt can be a bit overwhelming at first, but always remember that it’s a natural part of our financial expenses. We can’t avoid having debt because of certain unexpected factors. However, this doesn’t mean that we’re never going to be able to repay those debts.
Take note of those tips above and you’ll soon find yourself paying off debts in no time at all. It may not be as immediate as you expected, but you’ll eventually have those debts slashed off your concerns.
Follow these key success tips on how to manage your debts more successfully, and you’ll be able to get control of your expenses faster than you expected. Are you ready to take control of your debts?