There are reasons why people need to borrow money and it could be a need to fulfill a financial obligation, for emergency cases or simply to finance a personal project or goal like a business or a family getaway. For whatever reason, any debt or loan is usually a good idea to begin with but sometimes managing it the wrong way would result to disastrous financial blunder and that is what borrowers like you should avoid.
List all your debts. List down all your debts and loans in one file. Details should include amount of each debt, creditors, interest rate, duration, monthly payment and due date. This list will come in handy if you need to review your credit report confirming your entries on your list. Having your debt list visually available to you will provide awareness of your current debt situation and help you avoid penalty and unnecessary charges.
Make a monthly bill payment calendar schedule. This will keep you on track which monthly bills to pay according to your paycheck schedule – water, cable, internet, utilities, and more. By having a monthly bill payment calendar, you are able to organize your debt and loan payments schedule avoiding procrastination. The objective here is pay your monthly bills on time, don’t wait for the deadline because some billers add penalties even for a day of late payment or they will cut-off your line and suspend your account. That’s big trouble because most of these bills are for the services that we avail for our daily needs.
Decide which loan or debt that you can pay off first. In many cases paying off credit card debts first is a key strategy since credit cards incur higher interest than other types of debt. Prioritize the credit card with the highest interest rate because it will cost you more money in the long run. If you have a loan on payday, make sure to include this in your list of priorities. This type of loan is short-term. It can be availed quickly without a lot of requirements but make sure you use it for your needs so your loan will not go to waste. Whatever kind of loans or debts you have, make sure to be a responsible borrower to avoid financial problems in the future.
Create a practical budget plan. There are monthly expenses that you can control and adjust to save more money to help you fund payments for your loans and debts. If you cancel some monthly subscriptions for services and privileges that you don’t basically need do so. Avoid unnecessary spending such as dining out, shopping and paying for services that you can do on your own. Be practical with your grocery item choices and prepare a list of items before hitting the supermarket to avoid excess spending on items that you don’t really need. Be frugal and stick to your budget plan.
Consider consolidating your debts. Debt consolidation can work in your favor if you need to roll out your existing debts into a single loan that will incur a lower interest. This option will help lessen your burden in making monthly payments for various debts just make sure that you have a clear foresight of your fund sources to pay off your debt consolidation.