Majority of us have debts which range in various degree, size and complexity. The most important thing about debt is how it is managed and the effect it has on our general wellbeing. This short article is about the most effective and affordable way to manage your debt and thereby being debt free in no time.
REVIEW YOUR DEBT
The starting point is to have a comprehensive review of your total debt in a simple format that provide an overview of all your creditors and the amounts you owe. The total amount of debt and interest paid on each of the debts is very important to place priority to the sequence and affordable amount to payable. The best option is to have a debt payment plan bases on affordability and priority with categories such as non-negotiable, large amount, high interest, negotiable, small amount, low interest etc.
REVIEW YOUR INCOME AND EXPENDITURE
It is very important to review your income and expenditure with the aim of increasing your disposable income. There are several ways of doing that which will be a topic on its own. Our focus here is to maximise income and minimise expenditures as much as possible to have the much needed disposable income to manage debt effectively.
TALK TO YOUR CREDITOR
Always let your creditor know as soon as possible if you are struggling or aware of a situation that will affect you making payment. Using your payment plan call all your creditors to negotiate an affordable amount and frequency of payment you can maintain. Most creditors will work with you to set an affordable minimum payment plan as long as possible.
REGULAR REVIEW OF PAYMENT PLAN
Once you have been able to set affordable payment plan with all your creditors, it is even more important to maintain and review your payment plan regularly to aim at making affordable adjustment where necessary to clear off your debt as soon as possible. Also don’t forget to seek financial help and advice either free or paid.
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Dennis Bebo MSC, BSC, DEA, CeMAP