5 Great Tips for Managing Your Debt
Losing control of your debt can be incredibly detrimental to you and your loved ones. Credit card debt is probably the worst of all as many credit card companies can charge up to a 28% annual percentage rate. If you are only paying your minimum payments usually, the principle never gets paid off and simply increases with time. Below are some great tips to keep from going down the endless debt hole.
Start With an Effective Savings Plan
Many financial advisers recommend that you keep an emergency account for just those instances that happen in life. Instead of using your credit card, this account is there for any required expense. The recommended account is $1,500 to $2,000. Also, contributing to a savings plan provides another buffer for unexpected expenses.
Decreasing your expenses is the obvious action that directly reduces your debt. Trimming the fat means getting rid of expenses that are not necessary. This means prioritizing. It also means having some serious discipline. Impulse buys and unnecessary spending must stop in order to decrease your expenses.
Overpay Monthly Payments
Since interest rates for most credit cards and some loans can be exorbitant, paying more than the minimum amount per month will greatly and effectively chip away at the principle. Remember, the faster you pay off your debt, the cheaper it becomes in the long run.
Look Into Negotiating With Your Creditors
There are occasions when it may be possible to reduce your interest rate with the creditor by simply contacting their customer service department and asking for a decrease. Results usually depend on how consistent you have been with your payments.
Educate Yourself Financially
All one needs to do is do a search online and a plethora of resources are available to get financial education. There are even some companies that offer financial counseling, providing many different strategies that can be tailored to any situation.
Managing your debt may be a challenging process, but in the end, being debt free is a worthy goal for you and your family's financial security.