Most of us have debts in some form or another, and no matter the size of your debt (or debts), it’s important to take control of them. Even if you only have a small debt, keeping your payments up-to-date will ensure that it doesn’t get out of control. Larger debts need a bit more effort but it’s vital that they are managed properly, or you could end up with the debt increasing.
Whether your debts are from credit cards, personal loan, car loan, home loan or anything else, here’s how to take control of them like a pro.
List down your debts
It’s a good idea to create a list of all your debts. Write down what your repayment obligations are, what the interest and fees are, who you owe, and what the dates for your regular payments are. Putting this detail in a simple excel file and saving it on your computer is an excellent idea but if excel isn’t your strongpoint, a notebook will do. While it may be a little bit painstaking to make the list - it will provide you with the whole picture of how much you actually have to pay and will help to ensure you avoid incurring extra fees because you miss a payment.
List down your expenses and income
The next thing to do is list down your weekly expenses and how much you earn each week. Here, it’s important to identify the needs and the wants. Weekly expenses mean those that you need to buy and pay regularly – you should identify each expense as a “need to have” or a “want to have”. This list should help you identify areas for improvement - so where you can save some money you can add this amount to your debt repayments.
Make your payments on time
Now that you have your lists, it should be easier for you to avoid missing any payments. Paying your debts on time will avoid additional expenses from late fees and other charges. It also helps if you set a calendar reminder a few days before your due dates, so you won’t forget when it’s time to make a payment. If you pay by BPay, remember this can sometimes take a few days to process.
You can also set recurring payments, where the amount will be automatically debited from your bank account. If you can’t afford to pay the total amount regularly, at least make the minimum payment. While this strategy may not reduce your debts significantly, it will definitely help you keep a good credit standing and avoid any late fees.
Focus on the highest priority accounts
When your funds aren’t sufficient to pay even the minimum amount on each of your debts, focus on either your good standing accounts or your highest cost accounts first. This way, you will either save your credit score with a good standing company that you have been paying well, or you will save money by paying down your most expensive debt first.
Stop using your credit card
If you’ve dug yourself into a debt hole, stop using your credit card. Do the best you can to only live with whatever cash you have so all of those fees and charges associated with that credit card don’t keep piling up. Create a budget plan, stick to it, and buy only whatever your cash on hand will allow.
It’s OK to ask for help
Taking control of your debts may sometimes mean asking for help, and that’s generally when you simply can’t meet your repayment obligations anymore. If that sounds like you, here are some options:
Consolidate your debts
One way to take more control over your debt is to consolidate multiple debts into a single loan. This could make it a lot easier for you to track and pay because you have just one repayment to make on one due date each week. Of course it will depend on the fees and charges on your current debts and those on the consolidation loan, so always weigh up the costs first.
Safe Financial can help to consolidate your debt (up to $5,000) and we can also help if you simply need some immediate cash. Just take a look at our cash loans $1,000 - $5,000 to find out how quick and easy it is to get your hands on some extra funds. Once a loan is approved, the cash is usually in your bank account within a few hours – so you can take better control of your debts and finances like a pro!