Sunday, July 24, 2016

Manage Your Debts in Your Own Way

Once you have incurred multiple debts on your credit cards, you will realize the importance of savings & managing your finances. As the saying goes, prevention is better than cure. Hence the best thing for you to do is evaluate your expenditure and keep your expenses under control. You should remember that you fall in debt because you spend more than you earn. This is anyway not the right kind of financial habit. You should not spend beyond your means otherwise you will never be able to save for future. There might be a lot of emergency need of money for which you ultimately have to take out a loan. If you have savings you wouldn’t need to do this. However, once you are in debt, all these considerations become redundant. The only thing that matters then is how to manage your debts and come out of it fast.

Manage Your Debt

Why is debt such a big burden?

If you are not in debt you will never realize the full impact of what being in debt is like. There are a lot of added activities that come to your life with debt which can keep you stressed out for quite a long time. You have to keep a record of the monthly billing cycles of different debt and with 7 to 8 credit card debts to your account; this is a really hard job. Along with this, you also have to pay these bills within the due date otherwise late fine or other charges will be charged. You also have to entertain creditor calls even when you are at work or relaxing with your family or out having fun with your friends, and answer their numerous questions regarding the status of your payments. Thus debt becomes not only a financial but a social burden too.

How can you manage your debts on your own?

Here are a few steps to manage your debts:

Stop using credit cards– Once you are in debt it is very important that you stop using your credit cards. This is necessary because the more you use your credit cards the more amounts you will keep on adding to your debts. Instead if you use cash for all of your purchases you will know how much you are spending on what as you won’t be able to carry more than a certain amount of cash with you when you are out.

Pay the debts with higher interest first- If you pay off the debts with higher interest rate first then you can save a lot of money on interest payments. This is because the greater is the interest rate, the more amount of money you have to make as debt payments. If you pay off the debts with higher interest rate first, you are saving that much amount of money in the long run.

Thus by following the above two steps you can manage your debts on your own.

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