Finding yourself in debt is not an uncommon occurrence and regardless of the amount owed, you need to take steps to properly manage and repay the debt. If you have a small amount of debt, it may be easier to allocate monthly payments to reduce the amount owed. However, for larger debts, it can be difficult to contribute to repayments while still making monthly payments to daily expenses.
There is no question that debt repayment can be stressful and difficult, but with a strong debt management plan, you can reduce your debt in no time without needing an expert advice. Tackling debt management on your own, without expert advice, is a very doable task as long as you are committed, motivated, and organized.
The following are 4 ways that can help you manage your debt.
1. Organize all payments
The first and most important thing that you can do for debt management is to organize all payment information. Start by making a list of all of your debts which includes the name of the creditor, interest rates of each credit, minimum monthly payments, and total amount of debt owed. Having all of this information in front of you will allow you to see your true financial situation and help you to prioritize your repayments.
Throughout your debt repayment, continuously refer back to this list and update it as payments are made or note if more debt is added. This organized list will portray exactly how well you are managing your debt and if you should consider investing in expert help.
2. Consider interest rates
It is possible that you have different types of debt, all of different interest rates and minimum monthly payment. If you have both credit card debt and a line of credit loan, it is likely that the credit card will have a much higher interest rate than the line of credit. It is important that you prioritize the high-interest payments first as their interest will cost you more in the long run.
Another way to stay on top of the interest payments is it make more than the minimum monthly payment on the high-interest debt while making a minimum payment on the low interest. Place focus on lowering the high-interest payment as soon as possible, but remember that you must still contribute to all other debts monthly.
3. Make the minimum payment
Once you have a handle on how much debt is owed, what the minimum payment is, and what is the due date of each payment, follow the schedule outlined in your organizer to ensure you are contributing to repayment each month. It is important that you make at least the minimum payment each month to not collect more interest on your debt.
Not only should you make the minimum payment, but be sure to pay each of your bills on time. The late fee that is added to bills that are not paid on time each month can quickly add up and push you even further into debt.
4. Begin with a trial period
If you have decided to tackle your debt repayment without support from an expert, consider placing yourself on a short-term trial period. A three to four month period is a good amount of time to see if you are making progress with debt repayment.
During this time, if you notice that you have not been able to reduce your debt, if you are not making minimum payments, or if you are collecting more debt, consider the option of seeking help from an expert.