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Wednesday, December 11, 2019

A Guide to Managing Your Debt

African American man concerned about debt

Nationwide — Debt of any size can cause stress and easily get out of control. A small credit card bill can expand into something exponential, and soon enough, you’ve got a large amount of debt that sees you juggling payments without making much of an impact in what you owe.

You need to get your payments in order if you are to pay them off properly and quickly. Taking your eye off the ball, even for a second, can lead to missed payments. The following guide is going to highlight how to manage your debt.

1. Know who you owe (and how much)
Compile a list of your debts. While this may be terrifying, knowing where your money has to go and how much you are paying off means you can put together a plan of action and know how much you have to live off once the payments are made.

Calculate the total amount of debt, the monthly payments and the due date of each. Update this list accordingly, so you know how much is left to pay. You’ll find that seeing the numbers go down will help with your stress levels.

2. Pay your bills on time
It may sound silly but paying your bills on time is incredibly important for a few reasons. Firstly, not paying on time can lead to late fees – making it more difficult to pay off your debt. Secondly, repeat missed payments can cause your interest rate and charges to increase. Lastly, it will impact your credit score.

Set-up an automatic payment so that you do not have to remember to physically make the payment. This can take a lot of pressure off you. If you do, however, miss a payment, don’t wait for the next day to make the payment. Do it as soon as possible.

3. Know which debts to pay off first
Not all debts are the same, with certain debts such as credit cards, having a higher interest rate than other debts. Return to your debt list (step one), and see which is more costly so that you can set your sights on paying that debt off first.

4. Set a monthly budget
Do not lose sight of how much money you have to spend once payday hits. It can be all too easy to get excited about having money land in your bank account, but you need to remember that that money is needed elsewhere.

Set a monthly budget that includes:
* Food and drink costs
* Rent/mortgage
* Utility bills
* Other finances such as car repayments
* Fuel

You will also want to put some money in your savings in case you are hit with an emergency. Having a few hundred dollars in a savings account means you are ready for small issues such as a car breakdown.

5. Know when you need help
Debt can easily take its toll on your health, and sadly, it can easily become all-consuming. You can turn to debt lawsuit professional assistance, so they can lend a hand in deciding your next steps.

You can also find debt relief in bankruptcy, debt settlement, and debt consolidation – all of which have advantages and disadvantages.

No debt problem is unsolvable. There are many resources out there to help you if it all becomes too much. The earlier you face any issues you may be having, the easier it is to deal with it.

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