As I’ve said before, debt is unavoidable in life. Mortgage loan, car loan, credit card debts, you’ll always have some form of debt in your financial life. While a healthy amount of it won’t necessary ruin you, things can get ugly if you don’t learn how to keep it under control. These are my top tips for managing your existing debt.
Pay on time- stop wasting money on late payment penalties and revolving interests. You’ll be paying anyway, so why be late? If unexpected things happen and you really can’t make it on time, call your lender so that they can find a way to help you out, some may be kind enough to extend your due date.
Pay above the minimum- as much as possible, I really recommend paying your dues in full, but I completely understand how things can get rough sometimes. If paying in full is impossible, at least pay above the minimum amount. If you make it a habit to pay only the minimum each month, you’ll never get rid of your debts.
Don’t add any more credit- if things are starting to get messy, don’t add any more fuel to the fire. Stop using credit for a while if you’re struggling with your payments. Also remember NEVER to take on a new debt to pay off the existing one.
Use cash- it could be easy to forget and go overboard if you always bring your plastic cards along. Whenever paying for your basic needs, spend only the cash that you’re meant to use.
Watch out for your credit rating- there are many perks to having good credit rating aside from the ability to borrow money. Once you see a decline in your credit score, your creditors might increase your interest rates as well, which is not good because it can take longer for you to get rid of the debt with the higher interests.
Find a secondary source of income- if paying your debts start to become a burden and you feel deprived of the things you want, getting a second job can help you pay off your debts faster and buy other stuff that you desire.