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Managing Your Debts

By: Emma Jones - Updated: 3 Apr 2012 | comments*Discuss
Managing Your Debts

There are so many reasons why you end up in debt. Sometimes it is a big purchase or two, sometimes it just seems to creep up on you slowly and other times something unforeseen throws you off course. However you ended up there, it is never too late to get your debts under control. It may feel overwhelming and easier to ignore it but once you admit your situation and take control of it you can begin to reduce your debts and manage your money.

Be Honest With Yourself

Before you can begin to get your debt under control you need to get a clear understanding of what situation you are in. Take a look at all your debts, however big or small and how much you owe altogether. Then take into account your salary and how much you can realistically afford to pay off each month. Once you have done all these things you will be equipped with the knowledge to move forward and make positive changes.

Ask For Help

There is no shame in admitting that you have a problem and asking for help. In the case of managing your debts it is one of the best things you can do. Once you know what your financial status is then talk to your banks and lenders and see if they will work with you to create a suitable payment plan. You may surprised at how willing they will be to do this for you as it is much better for them that you are paying it off gradually than not at all.

Interest Free

There are so many interest free deals out there that it really makes sense to take advantage of them. If you have very bad credit then you may struggle to get one but generally there will be one out there that you can have. Use these to your advantage by transferring as much of your balance as possible so you can have time to pay it off without continuing to incur more debt.

Stay Focused

When you start to pay off your debts you need to prioritise the ones that are charging you the most amount on interest. Concentrate on ploughing all your money into them and just paying the minimum on your others until you have one all paid off. There is also no point trying to save money at the same time as any positive interest you get will only be cancelled out by the extra debt. At the same time, try to cut down any extra spending and stay focused on becoming debt free as soon as possible.

It is never a bad time to start managing your debt so get started as soon as possible. Firstly, make sure you are aware of your financial situation, how much you owe to who and how much you can afford to pay off each month. Next, talk to the experts and find out how they can help you. Then focus on the debts that are accumulating the most interest and try to transfer your balances to interest free cards.

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