Debt Management

Coping with debt is a fact of life for many of us today. There are many legitimate reasons why we make use of credit facilities and therefore ensuring effective management of our debts is important in our financial wellbeing.

Organisation

We will vary in the way we manage money generally but some workable system needs to be in place to ensure debt repayments are made in time. It is enough to manage the interest payments without incurring further charges or penalties due to late or missed payments. If we have several debts to repay, a system that enables us to maintain repayments is vital.

Payment due date

Life would be simpler if all our monthly payments were made as soon as we received our monthly income. For some, this can be achievable with direct debits and standing orders for all household bills along with debt repayments. At least then we know how much remains for housekeeping, fuel etc. Although it may be tempting to wait till the last minute to make our debt payments, it may be wiser to bring that date forward to payday to ensure there are sufficient funds available. For those whose income is received weekly, 4-weekly or irregularly - even greater care is needed to ensure debt commitments are met.

Moving debt

Some are skilled at ensuring there debt is located with the cheapest lender. So 0% balance transfers are commonplace and we are looking for the best deals available. This can make good sense as long as we remain in control, knowing when deals end and knowing the implications of this. Clearly being able to move debt incurring high interest charges can save a lot of money. Similarly if we are able to pay more than minimum payments on card/catalogue debts, it makes sense to try to clear as much of the higher-interest debt quicker.

Debt mismanagement

For some, there comes a point where our debt is veering out of control. There are simply too many demands on our limited funds and we need help. Fortunately there are a large number of debt management companies offering services to assist with the management, control and repayment of our debt. This can vary from general advice to specific action. Order can be brought out of a difficult position and a plan drawn up that is affordable and where each creditor we have is treated equally.