Everyone gets in debt every now and then. The problem is letting it spiral out of control. Debt no matter how small it is can be stressful. So just, imagine piles of them from different creditors. It can take a toll on your finances and even health life.
Therefore, it does not matter if you have a small debt or drowning in it. You need to find ways to make payments no matter what.
You can manage your debt personally or hire professionals like Carrington Dean Debt Management. However, if you opt to do it solo, here is how you can successfully manage it.
1. Know Who and How Much You Owe
The first thing you will have to do before you begin to think of how you are going to clear your debt is to make a list of all your creditors.
You will have to make a list of all the creditors you owe money, plus the amount owed and due date to be paid. This way you start paying them slowly. You can start with the huge debts as you proceed down the list or take care of the little ones first. The choice is yours.
Nonetheless, the point is that the list is a good start, so you know who and who are likely to be banging on your door soon.
2. Make Payments Every Month
You should always make your payments every month or when it is due to avoid being charged any late fees. Take note, that if you miss payments at the required time every month, your interest rate is likely to increase.
Besides, late payments are often hard to pay, so make sure you pay on time. You can set an alarm or a reminder several days before the due date, just to be ready for the D-Day.
Nonetheless, if you happen to miss the payment on the due date, do not wait until the next due date. Make your payments as soon as you get the money or remember to pay it.
3. Create a Monthly Payment Calendar
Debt is always stressful, especially if you do not know where to start with it. Nonetheless, we are here to show you the way.
You can always create an online or offline payment calendar for debts, that is the creditors and debts owed. After which you can decide which paycheck to use to clear it.
Likewise, you can use your paycheck calendar to set the dates to clear your debts. For instance, if your paycheck is consistent, the better for you as you can make consistent payment dates for your debts.
4. Make At Least the Minimum Payment
As much as it can be hard to make debt payments, you can try to make the minimum payment required. This way you be on good terms with your creditors and prevent your debt from growing.
You should note that, when you miss even a single debt payment, it gets hard to catch up leaving you accounts on default mode.
5. Decide on Debts to Pay First
Deciding on which debt to pay first it easy, if you have your debt and creditor list ready. You should always start with credit card debt, as credit cards are known to have higher interest rates. Likewise, it is better to start with the huge debts as you proceed to the little ones.
In relation, you can choose to pay off the smallest debt, just to do away with it. However, interest rates are always an issue when it comes to debt, so check on it.
6. Pay Off Collections and Charge-Offs
You can only pay what you can afford to pay, but that does not mean that you leave your accounts in bad condition. Always focus on keeping your credit accounts in good condition. Do not make sacrifices with your good-looking accounts for the sake of the ones already affected with your debts.
The best thing to do is to make payments whenever you can afford to do so, as your creditors will always continue to make their collections on your account until it is current and functional.
7. Fall Back on Your Emergency Fund
Anyone in his or her right mind knows it is always better to create an emergency fund, no matter how small it is. You can start small and grow your fund with time. This way you avoid small and big debts during an emergency.
Moreover, such funds often help in case you lose your job or your source of income gets cuts off one way or the other. You can live off it for some few months and if not use it to pay some debts.
In conclusion, nobody is immune when it comes to loans. A debt can save you when in need but it up to you to make amends and pay it before the due date. If it piles, let it be known by your creditors that you are making plans on how to pay it.
Otherwise, you can start with the above steps if you want to manage your debt seamlessly. Likewise, you can hire a professional debt manager to help you, depending on your situation. The choice is always yours.