Learning how to best manage your debts comes from years of experience. Finding out which ways work best for you when managing your debts can be a long process.
In the US the amount of national debt is in the trillions according to national statistics. Getting out of debt is a lot harder than getting in debt; however, it is not such an off-putting task once you get started. Through this article I will try and detail how to make the whole process easier for you, using different debt management techniques.
You should always have an aim of where you want end up with your finances. Your aim should be specific and measurable so that you can monitor how well you are doing. Having a specific target to aim for helps keep you well focused and motivated. An example of a good aim good could be something along the lines of ‘I want to reduce my debt by $1000 by the end of the year’, with this aim you can easily monitor how well you are doing, and you have an out-of-debt date to aim for. When you finally see the results that your effort has justified, you will enjoy the rewards.
Now you know what you want to do and when you want to do it, the next question is how? Grab a pen and some paper, and write down any ways in which you think you could save money. Your aim should go hand in hand with your plan. For example, if your aim is to cut down X amount of money in month 1, is there something in month 1 that you normally do that you cut out to save that amount of money.
When tackling your debts there are many things you could do, here are just a few:
- Budget – Note your income and any expenditure you have to work out how much you can afford to spend per month. Budgeting helps you easily identify how much you can afford to save while still paying all your monthly outgoings.
- Save on bills – Use price comparison websites to identify where you could save money. Check all of your bills including, gas, electric, and phone. You could possibly save money anywhere where you pay a monthly bill
- Credit Cards – By tackling your credit cards you could see an incredible saving. Check how much interest you are paying on your cards and check them against other card providers. If you are paying a lot of interest on your current credit cards you could check for a ‘balance transfer’ credit card where you could transfer your balance and avoid paying any interest for a period of time.
- Consolidation Loan – If you have a lot of debt you could take out a loan to cover it. Doing so allows you to pay off your debts over a longer period of time. Paying your debts off this way means your interest rate on the loan will be lower than what you were originally paying across your total debts.
- Sell unwanted items – Selling unwanted items around your home is a quick fire way to making some quick cash.
Work hard to accomplish your goals but only you can identify which methods work best for you. When it comes to managing and tackling your debts there are many avenues you can go down, if you persevere and find which ways work for you, you should definitely see the benefits. If you don’t see a decrease in your level of debt straight away, stick at it, there will be bumps along the way but it’s getting through the bumps that will see you reach your overall goal.
This debt management article was written by Andreas Nicolaides, a financial writer for MoneySupermarket.com