Debt can be difficult to get out of once you’re in it. Difficult, but not impossible. By following the correct measures you can easily escape the clutches of debt and keep it firmly under control.
At MoneyShop, we’ve created a guide in lowering and controlling debt that we think you will value.
Top 7 Ways to Reduce and Control Your Debt
Be Aware of How Much You Owe
The first step in controlling debt is acknowledging that you have it and becoming aware of the amount of debt you have. Take a look at your bank statements, expense statements and credit reports. These will help you identify the amount of debt you have.
Create a Separate Fund for Debt Repayment
When clearing debt, it's important to set up an emergency fund on which to fall back upon should you find it challenging to repay the debt through your income. This emergency fund should be separate from your savings and must be made specially to address your debts.
Prioritise Your Debts
Some debts are more important than others. The trick to getting debts under control is to identify which debt will reap the biggest benefit when paid up. A good strategy is to pay off the debt that has the highest interest rate first as it’s the one that can do a lot of damage to your finances in the long run.
Make Scheduled Payments
Many banks and loan providers give you the opportunity to make scheduled payments and automatic repayments possible. It’s best to set this up if you’re the kind who is prone to missing payment dates. Regularly paying your bills and debts can help you reduce the total amount of debts you have. If you can’t pay high, pay the minimum at least.
Keep Paying Non-Loan Charges Regularly
The charges you get on credit card purchases, your utility bills and any other expenses or collections like insurance premiums can also add significantly to the amount of debt you’ve incurred. It’s important to keep paying these up the moment you receive them as it will help you keep your existing debts under control.
Budget Your Expenses and Spend Wisely
When in debt, always budget. Identify what expenses are necessary and crucial and those that aren't. Spend on things that you absolutely must have, but try to find more reasonably-priced alternatives. With debts, any savings helps.
Find Ways to Supplement Your Income
Finally, if there’s a way you can increase your earnings, take it up. Be it a piggybank or a part-time job, anything you do to add to and supplement your income will help control your debts.