Manage Debt, Big or Small

We all have some type of debt that needs to be managed. If your debt is small then ensure that you keep on top of your payments so that it doesn’t spiral out of control. If your debt has already built up and is quite large then you will need to put a lot more effort into paying it off. If you want to manage your debt then take a look at these tips below.


Know What You Owe

You can’t start to pay back your debt until you know what you owe. Make a list of all your debts, which includes who the creditor is, the amount of debt, what you need to pay each month and the due date. You can confirm each of these debts by using your credit report. This will give you the overall picture of where you stand with your debt and allow you to be aware of what you owe.

You need to refer to your list of debts regularly, especially as you pay bills and every couple of months update your list as the amount that you owe changes.

Remember to Pay your Bills

Paying off your debt will only get harder if you are late paying or miss a payment as you will be charged a late fee for this. If you miss two payments consecutively then your finance charges and your interest rates will increase.

Use your computer or phone to create a calendar of when your bills need to be paid. You can enter your payments there and set an alert several days before the due date to remind you to pay. If you do miss a payment then don’t wait until the next due date, rather pay as soon as you remember to avoid it being recorded to a credit bureau.

Keep a Calendar for your Bills

You should use a bill payment calendar to help you determine which bills to pay with which pay check. Your calendar should contain each bill payment next to each due date. Fill in the date of each pay check. If you get paid on the same days each month then you can use the same calendar month to month, but if you get paid on different days each month then you should make a new calendar every month.

The Minimum is Better than Nothing

If you are not able to pay more towards your debt, you need to make at least the minimum payment. The minimum payment will not really help you to reduce your debt, but it will stop it from growing and ensures your account remains in good standing.

Missing payments will make it harder for you to catch up and your accounts may end up going into default.

Keep reading to find more ways to manage your debt…

Prioritise Your Debts

You will need to prioritise your debt, meaning you need to decide which debt you will pay first. Tackling your credit card debt first is a good idea as this form of debt will usually carry a higher interest rate compared to other debt.

You can determine, which debt to pay first by referring to your debt list. You can decide to pay the largest debt first or you may feel more motivated to start with a lower balance as this will drive you forward to tackle bigger debts.

pay off debt

A Fund for the Unexpected

If you don’t have access to savings then you will need to go into debt to cover an emergency expense. Even having a small emergency fund in place will cover little expenses that come up.

Set a small emergency fund goal and once you have reached this, you can aim towards a larger fund. Eventually, you will want to have an emergency fund that covers at least 6 months of living expenses.

Time to Budget

A budget is a vital tool for everyone with debt. You need to ensure that you have enough money to cover your monthly expenses and you can use a budget to plan ahead so you can take early action if you think you won’t have enough money for your bills.

Also with a budget, you can plan how to spend any extra money like putting it towards debt so you pay your debt off faster.

Do You Need Help?

If you are finding it hard to pay off your debt each month then you may need help from a debt relief company or you can consider debt consolidation. You will need to weigh up your options and choose the path that is most suited to you and your financial situation.

Debt can easily get out of hand and if you are suffering with a lot of debt then you need to take action, make a plan and stick to it and if you are struggling then you can seek advice from debt counsellors or consider another form of action like debt consolidation so you only have to pay one payment each month to pay off your debt.