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How to Manage Your Debt

  • Financial Literacy

Portrait expressive young woman with credit card

The impact of debt can add a level of emotional and mental stress to your life. Trust me, it’s not pretty and it’s not something you’ll want to live through. The horrible truth about debt is that it’s also a snowball effect – it can start small and just keep growing and growing without you noticing it.


Learning how to manage the debt and developing good money habits can save you from the stress. It may seem impossible at first, but it can be done.



1.    Find Out How Much You Owe 


The first thing you have to do is figure out how much you owe. The problem is most people don’t even realize how much debt they have actually incurred! List down each one of your debts and carefully add them up. This includes credit card bills and their interest rates, unpaid bills, and even loans you have yet to pay.



2.    Decide Which Debts to Pay Off First 


Don’t let the total amount overwhelm you. Realistically you won’t be able to pay all of them off in one go anyway so there’s no point in stressing out over that. Instead, once you’ve gotten the total amount, figure out which one you need to pay first. This will usually be your credit card bills because these incur interest each month. Find which of your credit cards charge the highest interest rate and pay that off first, then work your way towards the one that charges the least.


Once you’ve paid off your debts with interest rates, fix your list according to priority. How you do it is entirely up to you. I recommend starting with the smallest amounts first as paying these off can give you a huge confidence and morale boost.


Keep ticking off items on your list. Yes, it may take a while but there’s really no other way to it but through it.

The best way to managing credit card debt is avoid getting into it. To do this, you’ll need to know about proper credit card management.


First off, if you can pay with other means, do so. Try paying through cash or debit as much as possible. It doesn’t even have to be physical cash. You can do online bank transfers or e-wallets. This allows you to control how much money you spend because you only spend money that you already have.


If you’re eyeing a certain thing, such as an expensive appliance, gadget, bag – save up for it instead of paying for it through installment.


If you really must use your credit card, remember to pay for your bills on time each month. Don’t let a month go by without paying for your credit card bills. Late payments make it easier for you to accumulate debt because you not only have to pay for your bill plus the interest, but you now also have to pay for the late fee as well. And these late fees add up with each month that passes by. Yikes.


Keep a reminder on your phone or computer for your credit card bills. Set an alert to remind you about it a few days before it’s due so you have time to prepare.


If you’re in debt at the moment, don’t panic. You can still get out of it. Just follow the steps above to getting out of it and remember that once you’ve gotten out, try your best to stay out.



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AUTHOR BIO Your friendly neighborhood Shero.




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