Debt management troubles too many people in the modern world. If your debt is out of control, then you need to take steps to fix it – sooner rather than later or it will get worse.
10 Financial Tips To Control Your Debt
Most of such people have credit card debt, with average interest rate running very high and expensive. Here are some useful financial tips that you can follow to have more control over your debt.
1. Control use of credit cards – Most of the people in debts have many credit cards and they do every purchasing through these cards. This results in a huge bill at the end of a month. If your earnings are comparatively smaller, you must restrict use of credit cards right away. This will save you in paying high interest charges and penalties on delayed payments.
2. Restrict your spending — Adopt a habit of purchasing the things that are unavoidable. You should write down the items that are extremely necessary to buy and save the money that you did not spend this way.
3. Save as much as you can — One of the financial tips that you must always follow is to save money. The more you save that easier it is for you to pay off debts. Find out the ways to save money at home and in your bank account, however smaller an amount it may be.
4. Get rid of high interest rate debt- Always keep in mind that your high interest rate debt is only going to be bigger on your smaller earnings. So, get rid of that debt as your priority. Pay off the balances of your credit cards and loans, which are of high interest rates.
5. Pay off credit cards bills fully — Do not make the mistake of paying minimum due on your credit card bills as you may take many years to pay off your balance payments. Pay off the bills completely.
6. Build a cash cushion — You should build a cash cushion of at least six months to keep yourself going well in case of some crisis.
7. Mortgage payments — another financial tip is that you should not pay off your mortgage fully if you have other debts as well. Since mortgage is of low interest rates, you can pay off other costly debts.
8. Refinance your mortgage- if you have high interest rate mortgage, you can replace it by another mortgage of lower rates by refinancing it. This will bring down your monthly interest outgo.
9. Borrow from right source — In case you need to borrow for repaying your debts, avoid borrowing against your home as you may lose your residential property.
10. Take expert help — if you have complicated debt situation, take services of debt counseling agencies and consolidate your debts under one new loan.
Advice for young people
• Avoid overspending and excessive use of credit cards
• Start saving right from your early days in a job
• Keep a habit of making budget and sticking to it.