Debt. Is there a 4-letter word that anyone hates more than this one? Nobody like it, nobody wants it, and yet we all seem to be in it. If you have a little bit of debt you of course need to manage it and make sure you pay it down as fast as possible. If you have a lot of debt you need to make sure your budget can handle it and cut back on other things until it can.
Below are a number of helpful tips and advice for managing debt that will help you to get out from under it quicker and with less loss of your hard-earned money.
Knowledge is power. Know who you owe, how much you owe them, and when the debt is due. Make a list and put it prominently in the area where you take care of bills to remind you about it, and also update it periodically.
This may sound silly, but pay your bills on time! The more you have to pay in late fees the more you can’t use to pay down your debt. Also the interest rates will increase and force you to pay even more. Never pay a bill late.
Always make at least the minimum payment on any bill. This will at least keep your debt from growing substantially and will help keep them out of default too.
Figure out which Credit card has the highest interest rate and pay that one off first. Go down the line using the same rule and pay them off one by one.
If you have an account that is in collections put it in the back of the pile and take care of the bills that are in good standing first. Your credit already has taken a hit but it can’t get worse unless you let another bill go into collections. Don’t do that. Pay off the cards in good standing first and leave the ones in collections for when you have the extra cash.
Follow these rules and you will soon see your debt load reducing and the light at the end of the debt tunnel. It’s doable, but just takes some patience and time.