Finances

Smart Debt Help Advice

It’s a good idea to know how to manage debt even if you only have a small amount. If you have a little debt, keep up your payments to prevent it from getting out control.


On the other hand, if you have a significant amount of debt, then try as much as possible to pay off the debt while juggling payments on the debts you may not  be consistently paying on.

  1. Know who You Owe and How Much

List all your debts including the creditor, the total debt amount, the interest rate, due date and monthly payments. A credit report can help you confirm the listed debts.

Creating a list will allow you to see the bigger picture and awareness of your total debt picture. However, creating a list and forgetting about it will not be beneficial.

Make sure you refer to the list on a regular basis especially whenever you pay bills. Update your list every few months as the debt amount changes.

  1. Pay your Bills on Time every Month

Late payments make it more difficult to pay off debts as you have to pay a late fee for any payment you miss. Missing two payments in a row can increase your interest rates and finance charges.

If you use a calendaring system on your smartphone or computer, enter your payments there and set an alert to remind you before the due date. In case, you miss a payment, don’t wait until the next due date to pay.

Remember, a late payment may be reported to a credit bureau. Instead, pay as soon as you remember.

  1. Create a Monthly Bill Payment Calendar

Using a bill payment calendar will help you know those bills you have to pay and where you will get the money to pay them. You can create a monthly bill payment calendar by writing the amount you have to pay for each bill before the due date and fill in the debt of every paycheck.

If you usually get your pay on the same days every month, e.g. on the 1st or 15th day of each month, then use one monthly calendar. However, if you are paid on different days of the month, then create a new calendar every month.

  1. Make at Least the Minimum Payments

If you’re not able to pay anything more, then it’s wise to make the minimum payment at least. Of course, the minimum payment doesn’t help you make real progress in clearing your debt.

However, it does prevent your debt from growing and keeps your account in good standing. Missing payments makes it more difficult to catch up and eventually, your account could go into default.

  1. Decide which Debts to Clear First

It’s usually a good idea to clear credit card debt first. This is mainly due to the fact credit cards typically have higher interest rates than other liabilities.

You should give priority to a credit card having the highest interest rate as it is costing you the most and needs to be repaid as soon as possible.  A debt list will help you rank and prioritize your debts hence making it easy for you to decide which debts to clear first.

You could also choose to give priority to the debt with the lowest amount. If you need payday loan help, it’s better to get it sooner than later.

  1. Clear Collections and Charge-offs

Remember you can only pay as much on debt as you can afford. If you don’t have enough money to repay your debt, think of ways to keep the other accounts you own in good standing.

Avoid sacrificing those accounts in good standing for accounts affecting your credit. The best way is to pay past due accounts when you can afford to do so.

Keep in mind those companies you owe will proceed with collection efforts on your account until you’re able to bring the account current once again.

  1. Have an Emergency Fund to Fall Back On

If you don’t have savings, you may be forced to borrow to cover an emergency expense. Therefore, to avoid going into debt to cover an emergency expense, create an emergency fund.

This fund will cover all emergency expenses including those little expenses that crop up once in a while.

It’s good to start by creating a small emergency fund, $1,000 is a right amount, to begin with. Once you have been able to develop a 1,000 dollar emergency fund, try as much as possible to create a more significant fund like 2,000 dollars.

Eventually, you should build up a reserve of six months of living expenses.

  1. Use a Monthly Budget to plan your Expenses

Creating a budget is a good idea as it will help you have enough money to cover your monthly expenses. Planning far enough in advance will help you take early action when it seems like you will not have enough money to cover your monthly expenses in the coming month.

A budget can also help you plan to spend any extra money left after paying on your expenses. The money left after spending on your monthly expenses can help you clear your debt fast.

  1. Monthly Budget Worksheets

Those who find it hard to clear their debts and other bills every month should consider seeking help from a debt relief company such as a credit counseling agency. Other debt relief options include debt settlement, bankruptcy, and debt consolidation.

Each of these options has pros and cons, and it is wise to weigh the options available before selecting one of the options. Do you believe that you have a spending problem?

If the answer is a yes, then seriously consider seeking help from Debtors Anonymous which is a debt help group just like Alcoholic Anonymous.

About the author

About the author

Cormac Reynolds writes on fashion for some blogs and thoroughly enjoys it. He loves to travel when he’s not writing for fashion blogs.

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