Everyone has some debts to manage. Whether in small or big amount, debt payment is part of the monthly budget. Keeping up with payments is a goal that must be met to ensure that debts don’t go out of control. There are many consequences of improper debt management and scheduling. On the extreme side, there is default when you can no longer pay your debts. Another scenario is having too many debts to the point that these are already eating up a large chunk of your income and you need to juggle payments – or worse, borrow to pay off your old debts, which can be a vicious cycle.
There are many tips on how to manage your debt payment. Effective these tips may be, these can be hard to practice. But there are some basic tips that can guide you in solving your debt problem.
First, know who and how much you owe. By knowing exactly the amount you owe will enable you to plan how you will pay off your debts. Make a list of your debts including your creditors, how much you need to pay to each creditor, your monthly payment and when are these payments due. Look at this list regularly especially upon receiving your salary and paying your bills. Update the list on the regular basis.
Always pay your bills on time every month. Never postpone payment as late payment makes it more difficult to pay off your debt. Also, late payment most often leads you to pay a late fee which could add up to your expenses. If needed, use your gadgets – your mobile phone, personal computer, etc. – to alert you on your payment schedule to make sure you don’t miss paying your bills.
Make sure to pay the minimum amount due if you can’t pay your debt in full. Even if paying the minimum amount due will not make any big progress in eliminating your debts, it will help prevent your debts from growing to the point when you can no longer afford to them pay off. You will also need to decide which debts to pay first. Those debts that should be prioritized are those that have higher charges or interests.
Plan your budget and stick to it. While there may be some unexpected expenses that will come along, it will be good to have an emergency fund to cover these little expenses to ensure that you don’t miss out paying your other debts.
