Not all debt is bad or hopeless. After all, some debts you have now are your investment for a better future. Of course, part of managing your debt is to track your expenses, budgeting your monthly income and boosting your savings and emergency fund. Whether you are struggling with a personal loan, a bank loan, or credit card debt; here are 3 quick tips that will help you manage your debt.
1. Know Your Numbers
Knowing the total amount of our debt can be an overwhelming experience. The huge amount can make it seem impossible to pay off. Add to that the added interest amount and you’re almost going to cry. However, knowing these numbers is helpful so you can break down your debt’s total amount. You should also figure out your payment due dates and late payment fees. This information is easily found on your credit card statement and your other loan documents. This way, you can plan how much to pay each month and when to pay so you don’t incur additional penalties and interest charges.
2. Be Consistent and On Time
Once you have made your debt payment plan, then stick to it. Pay your monthly dues on time and don’t miss out. Dedicate a portion of your income to debt repayment and be dedicated in paying it on or before the due date. It will be difficult at first so do what you need to do, even set an alarm, so you don’t forget the due date. Also, try to pay more than the amount due so you shave off more of your debt as you continue paying it off. This will become a good habit which will become less stressful as time goes on.
3. Pay It Faster
If you are struggling with several debts then you should plan on which one to pay off first. You may decide to pay the one with the smallest amount or the one with the biggest interest rate. The method you use will depend on how much you can pay each month. In turn, this will determine your priority on which to pay off first. This does not mean that you don’t pay off your other loans. Instead, it means that whatever extra money you have, you put it all to the debt that you want to pay off first. Once you’re done with the first one, then you do the same to the next one on your list.
With these tips, you should be able to plan and prioritize your monthly debt payments. You may miss your payment dues once or twice because life happens. But as along as you get back to your plan and adjust accordingly; then you will still be on the right track to being debt-free. This is one of the requirements to gaining financial wellness.
Feature Image: Original Photo by Towfiqu barbhuiya on Unsplash.