Small or big, debt should be managed strategically to keep it within your manageable limits.
It should not be ignored even for a single month as it will result in penal charges for non-payment which is quite high considering the accrued interest charge and overdue.
If you do so, you will very soon find yourself in the spiral of debt trap from where it will be hard to get out.
Therefore, paying your monthly bills on a regular basis is paramount for effective debt management.
#1 Monthly Repayment Calendar
Knowing where you stand from your immaculate list, you should also make a monthly repayment calendar which will help you to pay back your debt on time and within the due date as well.
It will also help you to know about the debts that you need to pay first and accordingly write down the checks for each.
In the calendar, you should write down the check details against the specific date and you must diligently follow the same date every month.
#2 Arrange The Debts
While repaying the debts you must always ensure the minimum amount paid.
Though it will not have much effect in the reduction of debt it will certainly prevent the debt from piling up due to less payment and the accrued charges on such deficits.
Therefore, you should arrange the debts immaculately according to the rate of interest each carries and also pay them serially. It is always advised to pay the higher interest debts first as it costs more money.
Another significant benefit of following such process is that once you can clear off this debt you will have more money in hand which you can use to clear off the other debts.
#3 Manage The Good Accounts
In case you have damaged some debts already then it is better to focus more on the good accounts and try hard not to damage them.
When you have a scarcity of funds then you should not sacrifice the positive accounts for those debts that have already affected your credit score.
This way you will prevent any further damage caused to your credit score and also not have to take any collection calls.
You must have a list of all your debts, the amount borrowed, the rate of interest of each, the due date, the amount paid till now and the amount outstanding as well.
#3 Create A Fund
Always have an emergency fund to fall back on when you have such conditions.
Start with small amount and increase it gradually but make sure you save on a regular basis. Apart from that, a strategic and useful budget will also help you minimize your unnecessary cost which will further help you to create a corpus.
All this will help you to plan effectively for the future and channelize the curbed expenses for a more useful purpose which is repaying your debt at this moment.
You can also go through the credit card consolidation loan reviews if you are thinking on the lines of consolidating your loans which are also an effective way to manage financial debt.
What are you doing to pay back your debt? Share your thoughts in the comments below.