Times are hard right now, and you don’t need interest payments from your previous debts to make it even harder. This is why many people are starting debt management work that will help them cope with the economic crunch and the rising prices of commodities.
Debt management is more complex than paying your debts, although you can also do that if you can. Unfortunately, most will not be able to pay for debts they have incurred in the past. Otherwise, you would have paid for it before, right? Right now, the most people can do is pay a part of the loan every month and keep paying for it until every dollar is paid for.
Debt management is hard and can be detail-oriented, but if you are determined to get out of debt, you will endure all of it. Here are some of the things that you can do to minimize your debt and live a more or less comfortable life in these economically hard times:
Get a loan with lower interest.
As much as it surprises you to find out that the answer to your problem may be another loan, this is a tried and tested solution. But what you have to do here is to get a loan with much lower interest and use the money in that loan to pay for all your other debts. That way, your interest payments will be much lower. However, you must ensure you will use all the money to pay the debt. Some people who need to learn how to manage their money get a loan but do not use it to finance their loans. There needs to be a better approach.
If what you will be loaning will not cover all your debts, then pay for the loans with the highest interest rates. That way, you will only have debts that have lower interest rates. To get current loan rates visit www.lendingtree.com.
Pay the higher ones first.
As much as possible, prioritize the loans with the highest interest rates. This will help you lessen the interest you will pay on your debts. This is not to say that once you pay all those with high interest, you will stop the payments.
Also, if you have loans that do not have interest payments yet but will eventually have in a couple of months, prioritize those too. Remember that your target is to minimize your debts, and one way to help you do this is to have lower interest payments. For a snowball debt spreadsheet, visit Spreadsheet.
Practice budgeting.
It may be tedious, but budgeting can help lessen the expense you incur in a month. This is because you will be, in a way, curtailed into spending on specific products and services. Any additional expense must be considered first; you can often rationalize against such expenses. This is also true when buying food from the grocery stores. If you have a set budget and a list of products you will buy, your expenses will be significantly lessened.
Debt management is easy. You have to be determined to make it through.
If you have any questions feel free to contact me if you live in the metro Nashville area or seek out a fee-only Registered Financial Consultant (RFC) near you.
