Debt is one of the hardest things to successfully manage. When done incorrectly, you can find yourself sliding deeper and deeper into the debt spiral. Store accounts, credit cards, unsecured loans, personal loans, payday loans, when you’re in a pinch, you’ll turn to anything to survive. Sadly, this is the reality for more than a third of people.
The reality is that when you have debt, you need to be able to manage it. And, this will take great skill and discipline. Getting out of control on your debt payments can quickly result in you missing payments and falling behind on what you owe.
Here are six vital steps you can take to successfully manage your existing debt:
Firstly, you need to make a list of everyone you owe money to. You need to include the name of the person or company owed and you need to write down how much you owe them. Next, you need to list by which day of the month they each need to be paid. One of the easiest ways to access all your creditors is through your credit report. Once you have completed your list, you need to make sure that it is updated monthly. Change the amount owned to each one as you pay them.
Once you skip a payment or make a late payment, you’ll find it harder to catch up. Additionally, you’ll be penalized for every time you make a late payment. Always pay your debts on time. It is important to also note that with every missed payment, your interest charges, as well as the capital finance amount, will change. Set a reminder on your phone or computer to alert you to when each payment needs to be made and make sure you pay your creditors on time.
Before you decide on what to pay and what to not pay, you need to consider that skipping payment will negatively affect your credit record. If you cannot afford to make all the full payments every month, you need to make the minimum payment due. Doing this may take longer for you to pay off the debt, but it will ensure that the debt doesn’t keep growing
Pay It Off
Next, you need to decide on which portion of your debt you wish to pay off first, you need to work on and build on to your payment strategy every month. When looking at your creditors you need to see which ones charge the highest interest rate. These need to take priority for being paid off. Once one creditor is paid off, use the money towards the next one.
Never sacrifice any accounts you have in good standing for those who are calling for collections. Pay you good accounts as normal and work as hard as possible to catch up payment on bad debts. Always make sure that you call those you owe money to and keep them informed of what you will pay and when.
If you have followed all of the above steps and still find it hard to keep up to date with payments, then it might be time for you to seek professional help. There are numerous debt relief companies that have great records for helping those who are over-indebted.