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Dealing with debt can be very stressful — not only because it’s tougher to make ends meet
while carrying debt, but also because it requires a lot of time and effort to keep up with what
you owe. This is especially true given the average American has four credit cards.
While having multiple credit cards and loans in play can help you maximize your rewards and
build your credit score, it can also complicate your bill-paying process. Trying to keep track of
multiple debts at a time is no easy feat, especially in today’s busy world.
Here are five tips for tracking and managing your debts, meant to help you stay on top of what
you owe and make the repayment process as pain-free as possible.
When you’re juggling multiple obligations every month, it’s easy to get disorganized. This is why
many people find it helpful to sit down ahead of each month and create a bill calendar. This
calendar will keep track of how much you owe, when and to whom. Many borrowers find it
helpful to see their obligations written out clearly in a format that reminds them to make timely
Some people prefer to set up auto pay, which is a wonderfully convenient feature but only
works if you avoid your checking account becoming over-drafted. Sometimes it helps to play a
more active role in monitoring your bills rather than opting to “set it and forget it.”
On every bill you’ll see a minimum amount due. This is the absolute least you can pay without
accruing late fees and allowing your account to slide toward delinquency. So, it’s very
important to make at least these payments, on time, every month. Anything extra you can
afford to pay beyond the minimum will help you eliminate the debt faster and for less interest.
Consider Consolidating Debts to Streamline
Some people have success consolidating their debts, either by using a balance transfer card or
taking out a loan to pay off multiple lines of credit at once. The thought process here is that
reducing how much you owe in interest makes it easier to tackle debt.
The stronger your credit rating, the more favorable loan rates you’ll be able to get. Debt
consolidation for bad credit exists too — it just might take some shopping around to find
Throwing your funds willy-nilly at your debts is a missed opportunity. Prioritizing debts — that
is, paying them down systematically one at a time — can help you either save money or reduce
the time it takes to become debt-free.
Two popular methods are the snowball and the avalanche. The former is all about paying off
your debts from smallest balance to largest, with the advantage being the quick wins you amass
right off the bat. The latter prioritizes debts from highest interest to lowest interest. Of course,
paying the minimum amount due on all accounts is crucial whether you decide to try
snowballing or avalanching.
There’s no shame in wanting or needing some help managing your debts. Credit counseling
agencies exist for this exact reason. These professionals can offer you personalized budgeting
and debt advice and can even enroll you in a debt management program if you decide to go
that route. Appointments are generally free; just be sure to choose an accredited and reputable
counselor with which to work.
Keeping track of your debts and deciding how to best manage them is half the battle. With a
game plan, you can make strides toward becoming debt free.
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