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Managing debt
Managing Debt

The words debt and debt management can bring about very strong feelings in people. Some debts we are comfortable with, such as a mortgage. Other debts can be worrying and give us sleepless nights. If we have lost control of our credit card spending, we can find ourselves worrying about how we will make even the minimum payment, let alone get debt help and pay it off altogether.

The best way forward if you are struggling with debt is to seek some debt help. The worst thing you can do is to ignore what you are experiencing; the sooner you take a positive step forward and look for solutions, the faster your situation will improve.

Here are some ideas for debt management::


1. Seek free professional debt help.

Conduct an online search for debt help and debt managment professionals who could help you decide what the best course of action is, as well as steer you towards the specific people who can help. Just the act alone of contacting a debt help service can improve your situation immensely, as you will approach it with a much more positive frame of mind. It also helps to educate you about how to move forward and handle different debts.

2. Prioritize your credit card debts.

Write down how much you owe on each card and find out what rate of interest you are paying on each one. As part of a debt managment plan, work on paying off the one with the highest rate of interest first – even if all you do is make the minimum monthly payment on the rest. This applies even if you have another card which only has a small balance on it.

3. Create a detailed budget to figure out where your money is going.

Creating a budget will help to tighten up any areas where the money tends to slip through your fingers and creates debt. One prime example is eating out for lunch instead of taking your own to work with you. Figure out how much cash you could save each week and put that towards paying off your highest credit card balance. Look for other ways to tighten your belt too, such as changing from a contract phone to a pay-as-you-go one.

4. Consider using 0% credit card deals.

This can work if you are only in debt for a relatively small amount of money. You will be charged a transfer fee for doing this, but it can often work out to be less money than you would pay in interest by staying with your current card. Resist the temptation attached to having a new card by cutting it up as soon as you receive it. Use it only for the balance transfer.

5. Figure out which debts are the most important.

While we tend to think of credit cards as being the cause of most of the debt problems in North America, this is not necessarily true. Some people fall behind with paying other bills as well, and in this case, it’s vital that you are proactive about debt management in order not to experience any further problems.

Your mortgage is a good example. As a general rule of thumb, make sure you prioritize any bills which need to be paid to keep a roof over your head. Mortgage or rent should come first, followed by taxes and utility bills. Don’t shy away from getting in touch with the relevant companies if you are experiencing debt problems and require debt help; talk to them so you can work out a solution.


6. Don’t get into any more debt.

This might sound obvious, but it’s surprising how many people don’t attempt to solve their problems and get even deeper into trouble in the process. If you don’t like to look at bills when they come in and you keep on spending even though you know you can’t afford to, it’s time to face up to things and figure out how to pay what you owe.

How you deal with debt depends largely on how much money you owe, and who you owe it to. A debt of $1000 is very different from a debt of $100,000, for example, and may require a different debt management approach to clearing it altogether.

However much you owe, adopting a positive attitude towards getting debt help and dealing with debt management, in general, is the first and most important step you can make towards solving your debt problems and paying off what you owe in full. It can seem scary at first, but the process of taking control and seeking debt help is actually very empowering, and it can help you to improve your finances from today onwards.

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