Managing Your Debts Smartly

neve personal trainer 01

managing your debt

Debt has a way of creeping up on you if you’re not paying attention to it. Before you know it your debt is out of control. Because of the interest you’re paying on your debt, it makes it even harder to pay it off. That’s because the $3,000 you borrowed a couple of years ago now means you have to pay back a total of $4,000. Don’t even get me started on credit card debt because that one is even worse.

In order to manage your debts in a smart manner you have to first not accrue debts in the first place. But if you do, pay them back in a timely fashion. But if you just can’t do it and your debts begin to pile up, what can you do then? There are still some smart options for you. Let me go through a few of the ways you can manage your debts smartly.


If your debt is beginning to get out of control you need to see if your expenses are equally out of control. Create a budget and force yourself to trim costs. Get rid of cable television and pack a lunch for work to cut down on costs.


If you have already trimmed expenses as much as you can, now concentrate on increasing your income. You can increase your income by working overtime at your job. You can get a second part time job if you have the time. Otherwise you can sell your belongings at yard sales, Craigslist and eBay.


If you have a variety of debts at high interest rates, it may be in your best interest to consolidate those debts into one payment at a lower rate. Let’s say you have three credit cards at 19.99%, 24.99% and 29.99% interest rates. Each has a balance of $2,500. Consolidating works by getting a new loan at a lower interest rate, say 15.00% in the amount of $7,500 and then paying off those three credit cards. You can get a loan to consolidate your debts from a relative, from a bank or from a peer to peer lending site like Lending Club or Prosper.

Credit Counseling

If you need more help you can go to a credit counseling agency. These agencies can assist you with things like creating a budget and offering advice. But they can also create a debt management plan too. What this agency will do is negotiate with lenders to lower your interest rate and lower your monthly payments. You then pay the agency one payment every month and they will pay the creditors. Going to a credit counseling agency will show up on your credit report, which is not good for your score. However once you’re done paying off your debts this note will go away.

Leave a Reply

Your email address will not be published.