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Managing Your Debt

  • If you have found yourself in debt, it can quickly snowball into a much worse situation if not taken care of quickly. Debt has a way of piling up if the underlying causes are not remedied. Below are some quick tips to help you climb your way out of the debt hole.

    1. Find out what you owe – This is the most important step. You can not start to pay back what you owe if you don't know how much that is. Collect all of your bills and all of your outstanding loans. Add them up and see what the total amount you owe is, and how much is due each week. The sum might be a little scary when looked at like this, but it's important to know how much you owe in order to get a handle on paying it back.
    2. Organize – Once you know how much you owe, organize all of that information. See how much you have to pay back each week and each month. Try to consolidate any of these payments if you can. Prioritize which debts are the most important to pay off first, and put them at the top of your list.
    3. Budget – Now that you have figured out what you owe, figure out what you are bringing in. Based on your income, see how much you can afford to pay each week. Again, focus on paying off the most important debts first. Pay off your heating and lighting before you pay off your cable bill, for example.
    4. Reduce Spending – You probably owe more than you are currently making, which is maybe what put you in debt. Reducing spending is the best way to start climbing out of debt. Get rid of any unnecessary expenses. Anything you can get by without for a few weeks, get rid of it. You can spend money on luxuries once you are out of debt.
    5. Get Advice – If you are having an extra hard time managing your debt, consider getting expert help. There are many free resources online that can help you out, or you can contact professionals like StepChange Debt Charity. Don't go through debt management alone, it can be a very stressful and lonely process.

    Hopefully these simple tips will help you manage any debt that you might have. What it basically comes down to is knowing what you owe, knowing what you make, and prioritizing the bills you have to pay. If you can create a strict schedule and stick to it, you should be able to manage your debt with relative ease.