Debt Management – Doing It Yourself

A lady is shown managing her debt-related paperwork
Managing & Paying Down Debt
Part 1 American Debt – An Overview
Part 2 Types Of Debt
Part 3 Debt Management – Doing It Yourself
Part 4 Debt Help – Getting The Assistance You Need

Managing debt is not just about cutting down on spending. Yes, working out a realistic budget and sticking to it can be very useful. But, there are also other actions to take in the form of debt management that can help to reduce the levels of stress that debt can bring. In this article we shall examine:

  • How to assess your financial situation
  • Paying down your debts
  • Managing a work bonus

Assessing your financial situation

Looking closely at how much income comes into the home and how much is paid out each month can come as a shock. But, it is an important step to managing debt. Make a list of all income for the year and then add up all the expenses that must be paid. These include the mortgage or rent payment, utility bills, insurances, traveling expenses and food. The important expenses must be a priority.

The best way to tackle debt is to pay off the most expensive debt first

You might find that if you miss out luxuries like entertainment and the latest media device or fashion clothing that there is some money left in the pot. This can be put towards paying down your debt.

Paying down debt

If you have created a budget, cut down on spending and have some spare cash each month, it is time to look at ways to pay down debt. The best way to tackle debt is to pay off the most expensive debt first. So, choose the credit card with the highest interest rate and increase the monthly payment. Always make more than the minimum payment requested by the lender and you can cut years off the debt.

A young couple are depicted paying off their debts

If you can get a 0% interest rate card, you can transfer the balance although it is important to consider the transfer fee and how much you will save. In addition, this is a situation where discipline really matters. Don’t be tempted to leave the balance on the new card until the interest free period is over as it is likely that the rate will rocket after the offer ends. Stop using credit cards and use only cash or debit cards. This will help to reduce your debt sooner.

How to manage a work bonus

If you get an annual work bonus or a quarterly commission, consider using it to pay off debt instead of going on vacation. Put off your holiday plans for a year and enjoy a staycation whilst you continue the path to being debt free.

Staying motivated is essential and many people get disillusioned when they constantly have to grind away at the debt.

Stop shopping online using cards and sell unwanted gifts or household items you no longer want or need. By changing your daily habits you can also save on ready made lunches and expensive lattes. Each minor saving will soon add up and a change of lifestyle can also be exhilarating once you see how much you can save.

Staying motivated is essential and many people get disillusioned when they constantly have to grind away at the debt. But, if you consider the rewards and the peace of mind that lies at the end of the ordeal it is really going to be worth the effort.

Managing & Paying Down Debt
Part 1 American Debt – An Overview
Part 2 Types Of Debt
Part 3 Debt Management – Doing It Yourself
Part 4 Debt Help – Getting The Assistance You Need

About the author

David Warren

David Warren is an expert on personal loans across the United States. His career in banking has helped make David the loans specialist that he is today. He shares his analysis and insight into the personal finance industry on onlinecreditusa.com