Whether it is small or big enough, you have to manage your debt effectively in order to be debt free not only to chase your financial goals but to build strong credit score as well.
A lot of things can leave debt payment to another time like not paying your credit card bills, spending more than your earnings and lack of saving habits etc. However, below are the steps you can take to manage your debt in a best way.
Recognize your debts (how much you owe)
List down all your debts at a place in order to have an accurate idea about how much you owe. You should also include other essential details in the list such as total of each your debt, monthly payments to make, due date and percentage of interest rate etc.
It will allow you to have a clear picture of debt payments to be made by you, to build a reasonable debt repayment plan for months to come.
Deal with debts smartly
Prioritizing your debts (from big to small) could be one of the major steps to manage your debts in a best way. After doing so, deal with your precedence debts first such as mortgage & car loan payments and then move towards small payments like monthly bills etc.
Creating a debt repayment plan would be a great idea to prioritize and pay off debts as quickly as possible.
When you are getting loan from bank or a financial institution, they may tempt you to accept a repayment schedule or deal which is still huge for you, never accept and let them know exactly what you easily can pay.
By doing so, you will better be able to manage your day to day finances as well as to pay your debts off effectively without going out of money in last days of the month.
Try online banking
Off days and loads of personal tasks can be the biggest excuses for late or non-payments that can lead you towards horrible debt experience in future.
In order to prevent such excuses, try online banking or use international money transfer apps to make overseas payments even before due dates and deadlines. It will eliminate the visits of banks to repay your debts or to make vital monthly payments.
Make and stick with a monthly bill payment calendar
It is something handful that enables you to pay all your bills on time even without forgetting any of them. It also shows that what amount to be paid for which bill and how to make payment (via bank transfer or cash) etc.
Ready to use bill payment calendars are accessible on internet that also create payment reminders to keep you informed about due dates and other necessary details about bill payment.
Set up automatic debits from your accounts
Minimum payment towards your loans is not a good thing as it cannot help you get debt free quickly. That is the reason; you should set up automatic debits (more than the minimum) from your accounts for important payments in order to manage your debt in a best way.
Thinking about increasing the frequency of monthly payments is a great way to pay your debts off soon.
Get your payments automated
In this digital world, process of payments making has become easier and faster than ever. As you can easily access your bank account via Smartphone, you will easily be able to make payments on time without getting late. Similarly, international money transfer app allows you to automate your payments that can assist you to transfer money abroad in timely manners.