3 Ways to Start Managing Your Debt

When you have debt, learning how to manage it can be tricky. Chances are that you feel stressed or anxious when you think about your debt, which means you probably try to avoid thinking about it. Unfortunately, this won’t solve the problem. What will solve your debt problem is developing a proactive attitude.

There are many ways you can reduce and eliminate your debt, but you have to be willing to work hard and make some tough choices to do so. Here’s how you can start managing your debt today.

First off, figure out exactly how much money you owe. Collect all of your recent bills and start adding up what you owe. How much are your total monthly payments? What is the minimum balance due? One of the simplest ways to start managing your debt is to determine your minimum monthly payments, then to pay more. For example, if you need to pay $50 per month for one credit card, aim to pay at least $75 per month. While this increase is a small amount, it will help you whittle down your debt sooner than if you only make minimum payments.

Next, stop charging new items. While it’s easy to use your credit card to pay for groceries or gas, this will only add to the amount of debt you have. Instead, try to use cash or your debit card to pay for things. This will not only eliminate the possibility of your debt increasing, but it will help you consider whether or not you can afford to buy what you’re interested in purchasing. For example, if you really want to buy a new pair of shoes, consider whether or not you need them. Yes, you could spend $40 on new shoes, but a better option would be to put that $40 toward paying down one of your other bills, such as a credit card bill or student loan.

Finally, set some goals. How long do you want to spend paying off your debts? Do you want to be debt-free or just reduce the amount of money you owe? Decide what your short and long-term goals are regarding your debt. Possible goals could include becoming debt-free in five years or paying off a specific credit card in the next six months.

Remember that no matter how much debt you have, it’s important to be proactive when facing your financial future. The more you spend thinking about your finances and developing a plan to move forward, the sooner you’ll be able to enjoy a stable financial situation.