How To Get A Handle On Your Debt

These tips, which were gathered from multiple experts on managing debt, can help you free yourself from the burden of excessive debt.

 

Tip #1 – Develop A Personal Budget

The only way to truly get a handle on your finances is by understanding exactly where your money is going. Use free budgeting tools to track your expenses for a month.

Write down every penny that you spend. Then, you can go back and look at your expenses to figure out where your money is going.

You can then adjust your spending habits to reduce unnecessary expenses, freeing up more of your money to spend on other things.

 

Tip #2 – Ask For Lower Interest Rates

Sometimes, all that it takes to get a lower interest rate on your credit card is a phone call. If you are having trouble making your payments, contact your credit card company to see if they can offer you a lower rate.

Usually, they would much rather reduce your interest rate than have you fall behind on your payments.

 

Tip #3 – Consider Consolidating Your Debt

Managing multiple credit card payments can be challenging. If you can, you should consider consolidating them all together into one single loan. That way, you will only have to worry about making one payment each month.

A Federal Debt Consolidation loan can be a great option if you have outstanding student debt. Most graduates have multiple loans, which can make keeping track of your payments challenging. Consolidating them into one loan with a single payment can make the process of paying them a lot easier.

Credit cards can also be consolidated by transferring the balances of all of your cards to a single card that has a lower interest rate. Some credit cards even offer new customers an initial period of time without interest. If you need help with negotiation then consult this site – Money Expert.

 

Tip #4 – Decide Which Payments Are The Most Important

If you don’t have enough money to pay all of your debt each month, you need to decide which payments are the most important.

In most cases, the accounts that should be given top priority are the ones with secured debt. For instance, if you fall behind on your car payment or your house payment, it could result in a repossession or foreclosure.

If you fall behind on your credit card, on the other hand, it will hurt your credit but won’t leave you homeless or stranded.

 

Tip #5 – Consider Credit Counseling

If you are having trouble managing your debt on your own, you may want to look into using a credit counseling service. These companies will negotiate with your creditors on your behalf, working to reduce your interest rates or to get certain fees waived.

They also consolidate all of your debt into a single payment. Each month, you simply send your payment to the credit counseling service. They then forward each individual payment on to your creditors for you. These services can be handy. However, they do cost money.

Most companies charge a small fee for setting up your account. They also usually charge a monthly fee for managing your payments.

However, it still may be worthwhile to use their services since they can often do a better job of negotiating with your creditors than you could do on your own.

So what are you doing to get a handle on your debt?  Have you tried the tips I shared in this article?  Share your thoughts and comments below.