Debt Management: 6 Simple Financial Strategies You Need to Follow Every Month
For a majority of the South African population, debt is a common financial problem. Whether it is a car loan or credit card bill, many people are grappling with excessively high debt levels.
Excessive debt has severe financial and psychological effects. Besides the financial pressure of repaying monthly interest, debt can cause major anxiety, stress and depression to people.
If you are struggling to manage debt, it is crucial to be proactive about your finances every month. Here are some simple but effective tips that will help you regain control of your finances and life:
Stick to a budget
First off, create a budget before the start of every month.
A budget will help you keep track of your income and expenses and reduce the likelihood of ending up in debt.
Write down all your monthly expenses, including household bills, living costs, travel, leisure and more. Next step, prioritize your expenses so that you can cut back on unnecessary expenditures.
Once you set aside money for essential expenses, you can use the remaining amount for paying off debt. Budgeting is a great way to live within your means and get out of debt.
Set bill payment reminders
From credit cards to utility bills, keep track of all your bill payments. Save the due dates on your phone or mark it down on a calendar.
Pay bills on time
Avoid making late bill payments. Whether it is car loan or credit card bill, late or missed payments make it harder to pay off debt. Late payments come with a late fee. They will also adversely affect your credit score.
Make a point of paying all your bills on time, every month. In case you miss a payment, do not wait until the next due date. Pay it off as soon as possible.
Start an emergency fund
Having some savings will make your life easier during a crisis. After figuring out your monthly expenses and debt payments, set aside some amount to contribute to an emergency fund.
Prioritize debt payments
If you have too much debt on your plate, you need to prioritize debt repayments.
For example, you should first repay the loan with the highest interest rate as it is eating up a huge chunk of your monthly salary.
Get professional help
If you are finding it exceedingly hard to repay your debt, contact a registered debt counselling company. At Credit Matters, our qualified, experienced debt counsellors will contact your creditors and arrange for a reduction in the amount you pay each month for outstanding debt. As a result, you will end up paying a lower installment, which you can afford, every month.
Contact us today to live a debt-free life.