We all wanted to live an easy life which is why most of us were lured by the convenience of a credit card or loans. Your dream extravagant vacation or a seat in a posh restaurant for some fine dining is just a swipe away via your credit card. You can drive the car you’ve been eyeing on for so long with just one sign on a car loan contract. Let’s admit, having loans and debts is part of life for many people but you must remember that debt obligation is a long term process that will incur compounded interest and the payment part is a serious matter.
Debts can hamper your financial goals and security because you need to sacrifice your current and future needs for your past spending; but if you will manage your debts effectively, you’ll get back on track to take full control of your finances.
Here are 3 easy ways to manage your debts.
1. Organize and prioritize your debts.
To start with, you should list all your debts including loans and mortgages and know how much you actually owe including the interest. Make an inventory and prioritize debts that have the highest interests. A monthly bill payment calendar can help you organize your loans and debts better, so you can pay them on time. Make at least the minimum payment and pay-off these debts the soonest possible time, don’t wait for the deadline. Pay-off your debts at least a week before due date to be sure you’ll never miss any and that you avoid any late fees and charges. If possible, make bi-monthly payments so you can easily get out of your debts and you might also save on interests.
2. Create an effective budget and control your spending.
A rigid budget plan will help you control your spending. This is also a motivation for you to work on your financial goals and make you aware of your obligations, such as loans and debts. Make sure to create a doable budget plan and stick to it so you reap its benefit while focusing on your financial freedom.
One important thing about debt management is avoiding accumulation of new debts. To make this possible, you have to spend wisely and have the discipline to prioritize your spending according to necessity. It also helps if you trim down your expenses including stuff inside and around the house. Simple practices like turning the lights off and unplugging the appliances when not in use, is a big help. Never waste any resources. Conserve water by recycling it if possible. Shampoo, soap, toothpaste, etc can be squeezed out up to the last drop. Every cent you save is a big leap towards saving. Buying items on sale, comparing prices and quality of your daily necessities, even couponing can help you save more.
- Consolidate your debts.
One great way to manage your debts is thru consolidation. This is the best way to deal with high interest rate debts such as your credit card. One advantage of debt consolidation is having fewer payments to make each month, thus the less likelihood that you’ll be late on payments. By combining multiple outstanding debts into a single loan, debt consolidation reduces the number of payments and interest rates you have to worry about. Saves you money big time with less stress.
Click here for more tips on how to manage debt efficiently.
We are now in living in an era of too much uncertainty, including financial. Getting rid of our debt one at a time should be one of our top priorities so we avoid having bigger and deeper financial problems. The right mindset about debt management will not just help us achieve an easy life, but a peaceful, stress-free life as well. There is nothing more important but a life away from loans and debts.