There is no magic formula to keep debts under control, but if you manage them correctly and consistently you will be able to eliminate financial obligations that affect your credit score.
The first step is to be patient and consistent, the path of organization will help you achieve the financial relief you so desperately need.
Lifehacks for managing your debt:
Set a limit to your debts!
Establish your debt capacity and do not exceed it. Be aware of what you earn and how much you can spend. This way you will have better money management.
Classify your obligations!
Recognizing the type of debt is fundamental, whether it is a bank loan, credit card, car, or home loan, etc. Also, identify the interest rate you must pay for each one.
Include debts in your budget!
Specify the total amount you must pay per month, include it in your budget, and mark it as a priority within your monthly payments.
Apply the snowball strategy!
Without missing a single payment, start paying the smallest obligations first and then the largest ones.
Order them from largest to smallest; pay the minimum value for each one, in this step do not include the smallest one, because for it you must pay more money and so you will pay it faster; if you have extra money pay it to the debt that is closer to be paid off; when you have finished with the first debt continue with the next one and apply the same strategy until you pay them all.
Last but not least, don’t forget to save!
At first, it may be complex, but as you eliminate obligations it will become easier. Start capitalizing on the money you are no longer using to pay debts and remember that loans are the best tool for you to invest, achieve financial freedom, and meet your goals.
There are times when debts can get out of control for different reasons; bankruptcies, separations, excess obligations, unemployment, etc. If this is your case, don’t worry, there is always a way to solve your situation.
At 800 Credit Solutions, we have a team of experts that can analyze your case and help you improve your credit score. Sign up and receive your FREE consultation.
