Debt advice

Deciding that it’s time to get your finances in order and work your way out of debt is a big step — it’s the first step you have to take with any debt and credit management program, and it’s also probably one of the hardest.

The next step is to figure out whether you can create a debt management program on your own, or if you need some debt assistance from a professional debt relief agency. Regardless of the choice you make here, there are going to be a few things that you’ll be expected to manage on your own — basic budgeting and financial planning tasks, for example. It’s never too early to start getting your finances in order, but if you really don’t know where to start, here are a few simple tips to help you with even the smallest, simplest debt management program:

  1. If credit card debt is what’s causing you grief, stop using those cards right now! This doesn’t mean that you should close every credit line you have open — in fact, if you do this (especially while you’re struggling to manage your debt) your credit score will go down. But a good plan is to put those cards away, or even cut them up (maybe save one, just for emergencies) to stop yourself from using them and increasing what you owe.

  2. On a similar note, if you have trouble with impulse spending, try paying for everything in cash rather than with a card — even your bank account’s debit card. Many people find that it’s easier to spend a lot of money when they make the transaction with a card simply because they aren’t seeing the physical money that they’re paying.

  3. And finally, even if you’re getting professional help and advice with creating a debt management program, something you can do on your own — with a little bit of time and some patience — is to look back on all your expenses, purchases, and open lines of credit in the past few months. Make a list of your expenses, and figure out which ones have been essential (like food and rent) and which ones you can do without (like your Netflix subscription, and a large latte every single morning). By determining how much you can afford to put toward debt repayments every month, you’ll be able to create a long-term financial plan. It isn’t easy to cut out all the fun stuff, but remember that it won’t last forever.

Now we’re turning to you for some help: if you’ve had to work out a debt management plan, what tips and tricks helped you the most? If you’re just starting to make a plan, what’s frustrating you the most? Be sure to leave any and all comments/questions in the comments space below! More on this.