Most of us have this on-and-off relationship with debt that doesn’t seem to end no matter how much we try. But being in debt doesn’t necessarily mean that you can’t do anything about it. All you have to do is carefully consider your choices and think twice before taking every single step. In the next couple of sections, we’ll share some tips on managing debts like a pro!
Close Your Unused Credit Cards
You can start by closing the credit cards you don’t use anymore, and then work on new ways to free your cash. One excellent way to handle this financial crisis is by consolidating your debts. The idea behind this is to take several debts with high interest rates and cumulate them into one or more loans with low interest rates. Debt consolidation can be either achieved on your own, or with the assistance of your spouse/financial advisors.
Contrarily, if you’re looking to try something less risky, try getting in touch with your credit card providers and negotiate your current interest rates. You’d be amazed to find how complying most lenders are, particularly if you’re long term customer.
Have A Clear Idea Of Your Debts
If you’re looking to manage your debts, the first thing you need to do is make a tab of all your outstanding debts. This should include the creditor, the exact amount of the debt, the required monthly payments and the exact due date. In order to make this plan better, try using your credit report to confirm every potential debt that you have. Once you have these debts right before you, you’ll get an idea about the bigger picture and take your decisions more mindfully.
Don’t Miss Your Due Date
Late payments make it all the more difficult to pay off debts, as you’re required to pay late fees for all the payments you’ve missed. This means, if you somehow miss two payments in a single row, both your interest rate as well as the finance charges will automatically increase. In case you’re using a calendar-based system on either your computer or phones, add your entire list of payments and set alerts so that you’re reminded a couple of days prior to your due date. Also, if you somehow happen to miss some payment, don’t wait till the upcoming due date for sending in the payment. By this time, it might be already reported to the credit bureau. So, develop the habit of spending mindfully and paying on time to avoid any potential possibilities of debts.
Always Pay The Bare Minimum
In case you don’t have enough money to pay everything at once, try making the efforts of paying the minimum dues. Although paying this minimum sum, doesn’t play a major role in paying your debts off, yet it’ll still prevent the debt from increasing thereby keeping your accounts in clear, proper standing. When you do miss payments, it’ll be harder to get in place which will eventually result in the freezing of your accounts.
Manage Your Accounts Well
Remember, in almost every case, you’ll only be able to pay as much of the debt as you’re able to afford. So, if you have limited funds for repaying the debts, try keeping the other accounts in proper standing. Under any circumstance, do not sacrifice the accounts with good credit score for the ones that have already had a detrimental impact on your credit. Contrarily, try paying them past the due accounts when you’re truly in a position to do it.
Fix a Worksheet
Organizing a worksheet is probably the easiest way to monitor your savings and handle your debts. And when it comes to worksheets, there’s no simpler option than Excel sheets. Since almost all of us are acquainted with the basic nitty gritties Excel, this guideline will be pretty easy. All you need to do is come up with a savings plan, and religiously follow it in all circumstances. Once you make this a part of your daily habits, saving money and managing your debts will be easier than ever.
Use Debt Monitoring Apps
If you’re struggling to manage your debts, money monitoring apps can be your next best friend. Most of them are easy to use, and once you get a basic idea about their operation, managing debts will be simpler than ever. In case you’re not very familiar with these tools and want to know about the ones that make the cut, here’s a list of the top 5 apps that help you in saving money.
Take Help From Friends
If you’re not really confident about your saving habits, you can always ask your friends to help you. Discuss about your situation and tell them why you need their help. Your friends can go through your bills and remind you about the ones to pay. For some people, a physical reminder works way better than apps. So, if you belong to this category, taking help from friends is a great idea.
While all these solutions are viable, they are specifically meant for people who are currently in debt. So, what about those people who are not in debt and are looking to avoid it? If you fall in this category, you can try simple things like paying in cash instead of card, turning off the instant ordering systems, unsubscribing from emails that are related to sales, cancelling the memberships that you barely use and prioritizing your credit card payments.
Get Different bank Accounts
Getting different bank accounts is one of the simplest ways to avoid debt. For instance, you can have a salary account, one particular account for emergency funds, one for your travel funds and one for your regular spending. This will help you allocate your savings the right way and let you keep full track of your spending habits.
In either case, you need to have a clear understanding of the situation. Whether you’re currently in debt or in the brink of an imminent debt- you can never solve the situation if you’re in denial. Be aware of your problems and instead of panicking, devise a solid plan that’ll help you fight the mental and emotional stress.