The best tips on debt management are those that are easy to implement. But you must first understand, you cannot allow yourself to be a slave of debt.
In an economy fueled by consumer credit, these tips will save you in going deeper and deeper into debt.
Money tracking means that you should know how much is your income, expenses, debt payments and savings. You cannot effectively implement these tips on debt management without first knowing YOUR TRUTH…your present financial health. By being in control of your finances, you will know how much money you are going to have left in order to settle your debts with the creditors.
It would be an eye-opening experience when you stop your dependence on credit cards in your everyday transactions. Credit cards create an illusion of having money even before earning it. By using cash or debit card, you control your spending by using only the money you already have.
Among the tips on debt management we think is very important, is for you to build an emergency fund. Start with $1000. This fund is only going to be used for what the name says…for EMERGENCY. Car repairs, medical bill, and a leaky pipe, are some examples of emergencies where the fund is to be used. This will prevent you from using your credit card which will further get you into debt. Once you used the fund, you have to replenish it with your next income.
Debt Snowball is a debt management strategy made popular by Dave Ramsey. Here’s a simple way to explain it: Pay off your smallest debts first. Once the smallest debt in your list is completely paid, add whatever you were paying on that debt to the payment for the next debt in the list. As each debt is paid, add those payments to the next debt. Let the momentum continue, repeating the debt repayment process for each debt as you work your way closer and closer to financial freedom. Every payment moves you closer to your goal of being financially free.
If you prefer to have a credit counsellor to guide you, go to nfcc.org. NFCC is the nation’s largest financial counseling organization. Their network includes the 50 states and Puerto Rico. There sure is an NFCC Member Agency near you.
As you can read, the various tips on debt management are very easy to implement because they are easy to understand. As such, after you know about these tips on how to implement these tactics to manage your debt, you have fewer and fewer excuses not to use them.
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