Keeping up with a debt management plan is not everyone’s cup of tea. Everyone has to actively manage their debt for positive results. When you have a large amount of debt, strategies like Iva or debt management plan are necessary. But there are some other steps you have to take as well.
Make a List
Make a list of the following:
- The creditors
- Total amount of the debt
- Monthly payments
- Due date
Update your list every few months as the amount of your debt changes.
Pay Your Bills Timely
Late payments make it harder to pay off your debt. You’ll have to pay a late fee for every payment you miss. If you miss payments, your interest rate and finance charges will increase. Send your payment as soon possible.
Create a Calendar
On your calendar, write each bill’s payment amount next to the due date and fill in the date of each paycheck. This will help you stay on target and manage your cash inflow and outflow better. In addition, set a reminder or an alert several days before your payment is due.
Pay the Minimum Amount
If you can’t afford to pay anything more, at least make the minimum payment. When you miss payments, it gets harder to catch up and eventually your accounts could go into default.
Prioritize the Debts
Pay off the debt with the highest interest rate. Usually, it’s a credit card debt. Use your debt list to prioritize and rank your debts.
Plan an Emergency Fund
Work toward creating a small emergency fund – $1,000 is a good place to start. Once you have that, make it double or however much you can spare. The goal is to build up a reserve of five to six months of living expenses. A little money in the emergency fund every month can go a long way.
Budget the Monthly Expenses
Keeping a budget helps ensure you have enough money to cover your monthly expenses. Plan in advance for not enough money as well as any extra money you have left after expenses are covered. This will help you in personal debt management.
Recognize the Signs That You Need Help
If you find it hard to pay your debt and other bills month after month despite efforts, you may need to get help from a debt relief company or seek help through Debtors Anonymous, a debt-help group. Solution2Debt is here for your debt management needs as well. Contact us now!