Today, the average American has approximately $38,000 in personal debt. This doesn’t include home mortgages. Also, in 2018, fewer people were able to state they had “no debt” compared to 2017, with the percentage increasing from 23 percent to 27 percent.
As debt increases, many people are searching for actionable and effective debt help. If you are one of the millions of people in this situation, then the information here is for you.
Here you can learn some tips to help you manage your debt, regardless of how much you have.
1. Become Familiar with All Your Debts
There are quite a few Americans who underestimate the total amount of debt they have. While you may know the “big” amounts, like your car loan balance and mortgage balance, you also need to know the balances from smaller lenders.
When you know who you owe, and what you owe them, you won’t miss payments. You can also develop a more effective repayment strategy.
In addition to adding up your debts yourself, pull your credit report. This will let you know what is being reported.
2. Get Organized
Just knowing who you owe and how much you owe them isn’t enough. You also have to make sure you are paying your bills on time.
This can be challenging if you don’t know when everything is due. This is why you should create a monthly bill calendar.
On this calendar include when all your bills are due, and how much you are going to pay. This will help you see what paycheck has to be used for each of your payments.
3. Try to Pay More than the Minimum
While it’s important to make your payments on time, and at the very least you need to pay the minimum amount due, when possible, pay more.
By paying more than what’s due, you will be able to pay your debt down faster. Added bonuses of doing this include saving on the interest and improving your credit score.
If you are struggling to make minimum payments, or just want to get things paid faster, then a personal loan may be a smart option.
4. Determine What Debts You Plan to Pay off First
Paying off debt is the ultimate goal. When trying to do this, make sure to pay off your credit card debt first. After all, these usually have higher interest rates than other debts.
When figuring out what card to pay first, choose the one with the highest interest rate. That’s because this is the one that is costing you the most money.
5. Only Take on New Debt if Absolutely Necessary
You should only apply for a new credit card, and accept them, if you really need to. If you have too many accounts with any balance at all, it may reduce your credit rating. This is going to make it more challenging to manage your debt.
Always Remember – Debt Help is Available
If you are struggling to manage your debt, and you need debt help, there are options available. You don’t have to live with excessive debt.
To learn more about taking control of your finances, check out our article on debt consolidation loans. Our goal is to help you take control of your finances.