Economy

Top tips on managing your debt

Top tips on managing your debt

Managing debt can be difficult, especially if you are on a fixed budget, but here are a few things you can do to ensure that you are making the most of your money.

Monthly Budgets are The Key for Managing Debt


The first thing that you need to do is to sit down and make a budget each month. Include your rent, your utilities, how much you spend on food, petrol, and anything else that you need. Compare this with the money you have coming in and then take the difference and split it into three sections.
With the first section, set aside money in your bank account for an emergency. This is not spending money, this is money you can draw on if you run into an issue. With the second section, pay on your largest debt, even if it is much more than the payment due. With the final section, pay on all of your other debts as you can, afford.

Roll Over Payment Plan for Your Debts


When you pay off your largest debt, continue to use the third section on all of your debts, but roll the first onto your next biggest debt. If you were paying 100 pounds on your largest debt and 10 pounds on each debt after that, you would now be paying 10 pounds on each debt, and 110 pounds on your next largest debt. Each time you pay off a debt roll over the amount to your next debt until you have paid everything off. In this way you will not stray from your budget and will find that you can quickly dig your way out of debt.
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