Most people have to deal with debt at one point or another. Regardless of how much you owe, it is important to make your payments on time so that you don’t fall behind. You should also try to keep the total amount that you owe in check so that you don’t wind up overburdened by debt. Otherwise, you could quickly find yourself struggling to keep up with your payments.
Start By Getting A Complete Picture Of Your Debt
Before you can begin getting a handle on your debt, you need to know exactly how much you owe. Sit down and write out a list of all of your creditors. Next to each creditor’s name, include the amount that you owe them, how much your monthly payment is, and the date that your payment is due. You may want to check your credit report to make sure that there are no creditors that you have forgotten about. Keep this list updated so that you always have a clear picture of what you owe.
Make Your Payments On Time
Paying your bills late can not only damage your credit but it can also cost you money. Most creditors charge fees for late payments. If you miss more than one payment, your interest rate may also increase, costing you a lot more money over the long run.
If you have trouble remembering when your payments are due, you can use an app or a computer program to track them. These programs are designed to alert you in advance when payments are due. If you do happen to forget a payment, send it out the minute that you remember it instead of waiting until your next due date. Doing so may help minimize the impact of the late payment on your credit score.
Use A Calendar To Track Your Payments
Using a calendar can be a great way to visually track when your payments are due. Begin by entering your paydays into the calendar so that you can clearly see when you get paid. Next, add all of your bills to the calendar on the day that they are due. Include the total amount of each bill. That way, you can figure out which paycheck you should use to pay each bill. If your paychecks fall on the same dates each month, you can reuse a single calendar for each month. Otherwise, you will need to make a new calendar at the start of each month.
Always Pay The Minimum Amount Due
Ideally, you should pay as much money as you can to your credit card each month. At the very least, however, you should at least pay the minimum amount that is due. This can keep your debt from getting any larger and can also help prevent any negative information from being reported to the credit bureaus.
Prioritize Your Debt
Go through your debt to figure out which creditors you should focus on first. Typically, credit cards take priority since they tend to charge the most interest. Come up with a list ranking your debt in the order that you plan on paying it off. That way, you will have a goal to shoot for and will be able to track your progress along the way.
Deal With Collections
Any accounts that have gone into collection should be given lower priority than accounts that are currently in good standing. Keep making your payments to your regular creditors on time. If you have any extra money, you can then apply it to accounts that are in a collection. Keep in mind, however, that creditors will keep pursuing you until you pay off the balance that you owe. You can get a company to help with this according to Money Expert.
Create An Emergency Fund
Having plenty of money in savings can help eliminate the need to use credit when emergency situations arise. Ideally, you should try to put at least $1,000 into a fund that is used for emergencies. Once you have that money set aside, don’t stop saving. Continue adding to the fund until you have enough saved to pay for your living expenses for six months.
Budget Your Money
Creating a budget is a great way to keep yourself from overspending. When you know exactly how much money you have coming in and where it is going, it is easier to stay on top of paying your bills. You can also track whether or not you are going to have any money left over that you can apply to your debt to help pay it off more quickly.
Managing debt can be challenging. If you are struggling to make your payments on time, consider working with a company that specializes in debt relief. Credit counselors may be able to help you negotiate with your creditors to get better terms or reduced fees. If things are really out of hand, you may even want to look into bankruptcy. It is important to research all of your options so that you can decide which course of action will give you the relief that you need.