Apart from your monthly budget, you hardly get your money tamed in boundaries. You feel that your credit card payments are not done yet, debt payments to bank are still pending.If you really want to control this debt, check your spending patterns and try to find out unnecessary expenditures. Here are some tips to get mounted Debt Under Control.
Measure that you should take care to get your Debt Under Control
Figure out exact debt
Step 1 for Debt Under Control :- Figure out and write down each left over debt. Don’t leave single penny unaccounted because this is the only way to find out how much you owe to others. If in any case your debt repayments are touching one fourth of your monthly income, you are standing in danger zone.
Build a budget
Step 2 for Debt Under Control :- Once you have your exact debt figure, sum up your income from all sources. Now draw a budget. You can set deadlines to your repayments. You should be realistic and disciplined so as you don’t spend or borrow more before repaying your previous loans.
Watch unwanted expenses
Step 3 for Debt Under Control :- You can draw certain amount of money at the beginning of the week and keep you credit or debit card out of your reach. This way you will have less cash to spend.
Understand the basics of debt reduction
Step 4 for Debt Under Control :- Cut down your expenses and save extra money; repay the debt bills till date. Once you have saved money, repay the debt with highest interest rates first. This will manage your existing higher interest rates debts.
If it’s your credit card bill, it is extra balance in your card. Once the highest interest rate debt is over, start repaying next highest interest rate debt.
Move to a cheaper interest rate credit card or loan
Step 5 for Debt Under Control :- You can switch to the credit cards with lower interest rates. Try out different credit providers. But make sure you are not falling trapped into any offer that is given for the short period of time and the given interest rates are actually very higher than your previous card.
It is good to choose lower interest rates for a longer period than to choose 0% interest rate for short term. Otherwise, you will have to switch again in next few months.
Pay in cash
You find many tempting advertisement in every next shopping store, and you start feeling false need of things. If you carry your credit card everywhere you go, keeping it in your wallet is little difficult. Now many store partnered with banks gives you cash back offer and thus many of us fall into the trap. Therefore, keep cash and avoid cards while you go outside, this will help you cut down on credit card swipes.
Lastly you can switch the bank. Switch your account to low interest rates banks and it will help in managing heavy bills. Go for better overdraft options too. Find out more suitable mortgage options as it is a big expense each month. However, consider hidden switching charges. Cost of switching may be higher than staying back.
Keeping eye on each penny while spending is very essential, as this avoids mounted debt in long run. Once all debt is over, don’t go on spending spree without considering pros and cons.