Debt management process is very crucial. All the debts including the small including the little debts should be managed effectively. This will ensure that such debts are not out of control. This process should start with making a comprehensive list of all the debts including total amounts of these debts, the creditors, due date and monthly payments.

Your credit can also help you in confirming your debts. You are advised to refer to this list periodically, as you continue paying your bills. The list should be updated after some few months. The following are the effective tips that can help you in managing your debts.

Paying your monthly bills on time

Individuals who pay their bills late have a hard time paying off their debts. Again you will be charged a fee because of paying late. Your finance charges and interest rate will end up increasing if you happen to miss some payments. To avoid this, you should enter your payments in the calendar and then set an alert to remind you when to make your payments. Your lender might report you to the credit bureau if you miss your payment.

Prioritize your debts

You need to decide which debts need to be paid off first. You should always prioritize on credit card debt. If you have several credit cards, then you should start with the one having the highest interest rate. Your debt list will help you in determining which debts need to be prioritized. Alternatively, you can decide to pay off the debts that have the lowest balances.

Creating a monthly calendar for making your payments

The use of a bill calendar is helpful in figuring out which bills will be paid with which paycheck. This can be done by writing all your bill’s payment amounts next to their due dates. The dates for all the paychecks should be filled in the calendar. This should be followed by filling in the due dates for all the paychecks.

Paying the minimum monthly payment

This is for those individuals who might not afford to pay something extra. Such people are advised to make the minimum payment even if this might not help them in making real progress when paying off their debts. This is one way of preventing your debt from growing. Your account can become default if you do not make your monthly payments.


Using an emergency fund

Setting up an emergency fund can help you in covering your little expenses that might come up. Creating an emergency fund is very helpful for those people who do not have access to savings.