Managing Your Debts

Debt management is an art seldom known to even the most intelligent beings. Irrespective of the amount of debt you owe its management is crucial. Even the most successful people are liable to pay debts, but they know the trick to pay them off smartly. Never let your debts pile up, or it will kill your present and future endeavors.

You have to juggle between different liabilities to keep the stress away. Agree that it’s not easy as the majority of us do not know the essentials of proper debt management. Here, we will enlighten you with some of the tips that will change the way you approach debt and its settlement.

Be sure about your debt amount

First of all, calculate the amount of total debt you owe in the form of bills, monthly payments, and interests. Clarify the numbers with your credit report, use all three agencies. The information will allow you to see the bigger picture, which in turn will help in creating a long term plan. Keep a regular check on the list and update the plan as the debt amount decreases.

Pay bills timely

Late payments are one of the biggest hurdles in debt settlement. For a month, they might look like a nominal loss, but it starts a chain that accumulates lots of late fees. In a few months, the finance charges and interest rate will automatically increase.

Use an app which alerts you for late payments. It is a simple way to pay the lenders on time. In case you miss a payment then settle it as quick as possible, or the event would be reported to the credit bureau.

Settle the biggest debt first

Be clear about our credit card interest rate and rate them from highest to lowest. It’s advised to use the maximum money to settle the biggest debt first. It allows you to get rid of your biggest liability while paying off small sums for other credits.

After completing the biggest hurdle focus on the second one and settle all the debts, respectively. With time the total debt amount will become minimal, and you will get free of the liabilities.

A budget works

Even though it might seem obvious and outdated, you must never overlook the benefits of budgeting. The best personal finance tool will save you from debt issues and even prevent you from availing extra credit. Your budget should be focused on clearing the debts more than anything else.

However, you should also save a little bit of money. You won’t realize the power of savings until you need emergency money. Make sure that you do not buy anything on credit as sticking to the budget will be your best bet to settle the debt.

Remove your credit card from online stores

As a retailer, we know that having a credit card is tempting, especially when you are constantly nudged with lucrative advertisements. Every online shopping website will have your credit card information to simplify the buying process. But, in reality, they use your information to create the best deal possible. Naturally, most of us fall for their bet and end up buying things we do not need.

Delete the information so that you do not get distracted from your goals. Instead, use a debit card if necessary.

Create an emergency fund

An emergency fund will work as your back up anytime you meet and unwanted situation. It helps one to stay on the track during tough times. The fund will also come handy if you feel the need for buying anything necessary.

Our advice will be to to start with a small $1,000 fund which can later be raised to $2,000. Have an aim to collect money which will let you survive for six months without any income.


Debt management requires constant commitment and vision. Your plan must be solid enough to cover future plans and flexible enough to change according to situations. It is always better to stay away from debt rather than planning methods to settle it afterwards. Only buy things which are essential and pay their bills before the deadline arrives. Never gamble with your financial future. You could end up in a bad place which could take years to recover.