Best Way To Pay Back Your Debts
There are two main methods for tackling debt:
- Make sure you manage your own debts and organise a way to pay back companies using effective strategies
- You can seek help via bankruptcy or a debt management plan
- Make sure you know what you owe
Make sure you prioritise the debts which have higher amounts and a higher interest. These should be your main priority and set a red alert off in your head. An example of these high interest debts would be payday loans and credit cards. Things such as car loans, mortgages and student repayments have low interest payments. Make sure you dig through all your financial records and you find out what and who you need to pay in priority order. This should give you a good idea where to start first.
2. Divert some of your cash flow
After you have calculated your living expense you need to figure out an amount you can contribute to paying back your debt. Check your credit report so you have a good idea of what to pay and if you can get some credit to help with the situation. One option would be to get extra credit for the purpose of debt consolidation, this can also help you boost your credit score and save in the long run.
Make sure you have emergency funds ready just in case. The emergency funds should help you recover when you experience unexpected shocks outside of usual spending. This can be done by consciously saving money wherever you the opportunity, this includes budgeting where you can.
3. Stick to your plan and plan ahead
Make sure you know how to initially settle the debts, make your plan and stick to it. It most cases it would be hard to stop the plan and change course.
Once you have the ball rolling and you have a consistent schedule, watch and enjoy as your debt disappears and celebrate the small successes and milestones along the way.