George Carlin once said that we tend to buy stuff that we don’t need with money we don’t have. Although this could be a reason for being in debt, there are other emergency situations where the only way out would be to borrow some money. Emergency situations could be anything from college tuition fee to medical expenses. If you are in debt, then paying it off will give you a sense of peace, even though it’s easier said than done. But you can manage your debt to borrow some time and here are 6 effective ways to do so.
1. Prioritize by listing your debts
The first step to effective debt management is listing out all your debts – however big or small. By doing so, you will get a better understanding of the amount you owe and you can plan to clear it off in a much more efficient manner. Although listing out all your debts will consume a lot of time, it is worth the effort and you should probably start doing it.
2. Work on a strategy and set due dates
Once you’ve listed out all your debts, you should strategize a plan of action. And when you do, set realistic goals and strive hard to achieve it within a particular time frame. You also need to consider the piling interest on your debt while setting the time frame, so sooner the better. Once this is done, you can consider other options.
3. Get in touch with your creditors
Talking to your creditors is a very important part of debt management. Contrary to popular belief, banks and other intuitions to which you owe money will help you pay your debt. Since getting the money back is in their best interests, they will even give you a discount. When you talk to your creditors, make sure to let them know that you are struggling and finding it hard to repay the money you owe. This, in most cases will work in your favor.
4. Manage your expenses
Try to cut down on the money you spend and try to save as much as possible. If you are going to live a lavish lifestyle, then you cannot save and neither can you pay back your debts. So, fix a budget and make sure that you don’t cross the limit. Use your smart phones and tablet PCs to your advantage and install an expense management app. This will help you in keeping a tab on your expenses and you can also consider setting aside certain amount of your income well in the beginning to pay off your debts.
5. Find better investment plans
Once you start saving, don’t keep the money idle and consider investing the money you have saved. Even if it doesn’t earn you much, it will at least compensate the piling interest on the money you owe. A lot of people who are in debt try to invest their savings on some safe options and use the interest to pay off the debts. This way, your savings will be untouched and you can effectively clear your debts.
6. Consider a loan
If you can manage to get a personal loan with an interest rate that is lower than the interest of the money you owe, then get it by all means and clear your debts. A personal loan to pay off credit card debts is a good idea and you can have good credit scores.
It might seem impossible to get out of debt, but you can very easily clear off your debts with proper planning and these simple tips will sure help you.
This is a guest post by Jake Anderson of fastinternetdeals.com, a site that offers savings and current information on att internet service as well as att.com services.
I'm Louida from Atlanta, Georgia and I'm a mother of two daughters, blogger, and full time working mom at a Business Consulting Firm.
I love helping others learn how to start working from home on the internet free to supplement their current income.
I also blog at Productreviewmom.com
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