Having debt can be very stressful. You constantly have a number looming over your head of how much you owe to different people, and it can be overwhelming. While getting in to debt is very easy, getting out of debt is a tedious process. With the swipe of a few credit cards you can find yourself in a large amount of debt, or if you had an unexpected medical expense, you could have a large medical bill to pay. No matter what your reason for being in debt is, you need to take the proper steps to get out of debt. You will need to manage your debt, and have a plan of how you are going to start paying off some of your bills. The process of managing your debt can feel like a large burden on your shoulders, but if you take the right steps to manage it, it will feel like you are more in control.
The first thing you will need to do when managing your debt is to know how much money you owe, and to who. Although adding up all of these numbers can be very stressful, it needs to be done. You should make a list of all the debts that you owe. On this list, you should write whom the money is owed to, the total amount you owe, the monthly payment, and the due date. You can check this list often when paying off bills, and you can update it to the current amount owed once you start paying monthly payments. This will help your organize everything so you can start to budget according to how much you owe each month to different creditors.
One of the best things to do when managing your debt is to make a bill payment calendar. You can use one on your phone, or you can use a physical one, whichever you prefer. On this calendar, write when you get paid, and how much the paycheck will be worth. Then, you can also write on which date your bills are due and how much they are. This will help you budget each paycheck because you will see which bills you can pay with each paycheck. For example, if you get paid on the 1st of the month, and you have a bill due on the 5th, you will know that the money will come from the paycheck on the 1st. You can then budget for other necessities that will be purchased with that paycheck after you subtract the amount of that bill from your paycheck.
Another step to take when managing debt is to make sure you pay all of your bills on time. This is where your calendar will come in handy. If you have to make a late payment, it will only increase your debt because you will have larger bill to pay off because of late fees. If you miss two payments in a row, your interest rate and finance charges will increase, which will make it even harder to get out of debt. If you have the option, and you know you will have the money to pay off bills, you should set up automatic payments either through your creditor or through your bank.
You should always pay off any collections or past-due bills first. If you have positive accounts, you will want to start paying those off second. You do not want to sacrifice your positive accounts for ones that are already pulling down your credit score. Pay off the past due accounts and try to get them in good standing first. Just make at least the minimum payment on everything else that you have. Although this does not really help pay off debt, it does keep it from growing larger. If you pay the minimum payment, you will also not have any late payments, which will make your debt worse.
Paying off your debt can seem like an overwhelming task that will take a long time to accomplish. Although paying off debt is very tedious, and can take awhile to accomplish, it will be worth it in the end to know that you took the right steps and got your financial situation back to the way it should be.