Friday, December 31, 2010

Debt Management From Home

With the current economic crunch, a lot of people are feeling the burden. Prices of basic commodities have gone up and in contrast most of their stock portfolios have gone down in value because of the stock market problems. Because of this, life is harder and some people who have loans may feel it is harder to make payments than before. 

But although it is hard, it is not impossible. And you don’t really need an expert to do that. You can always practice practical saving and debt management work that can save you at least some money for the rainy day. Below are some of the simple ways that you can manage your debt without really having to pay for an expert's advice. 

1. Prioritize debt payments. 

Remember that you are not only paying for the money that you have loaned, you are also paying for the interest that you have incurred. This can be an additional burden for you and the hard part is, you did not even got to use those interest payments. They are just add ons to the debt that you have. 
If you have extra money, pay for your debts. Look at the debts that you have and pay for the ones with the highest interest rates. Some experts suggest that you set aside a percentage of your salary to debt payment to ensure that you will be slowly chipping away the debts. 

2. Save on utilities and other expenses 

Cut down on the things that you can cut down. This includes utilities such as electricity, gas, water, services like plumbing and gardening and other household expenses. You may not realize it but you are actually paying for more than the average family size usually need because of wastage. Turn off the lights and the TV if you are not using them. The same goes with the water. If you can walk, don't take the car. These simple areas can help you save a lot, which you can use to pay for your debts. 

3. Cut the credit

Don’t get a loan anymore. If you don't have money, then practice saving and not spending! Don't borrow from other people. And if you have to borrow because of emergency expenses, make sure that you negotiate for lower interest rates or no interest rates at all.

If you have a credit card, dispose them or leave it at home and only use it for emergency situations like when you need to pay for medical bills or medicines. Otherwise, leave it at home. That way, you will no be tempted to spend more than you should. 

4. Make a grocery list 

Going to the grocery or to any store with a set of products that you will need to buy is a proven effective way to cut spending. With an already set items to buy, you will not be tempted to get things that you do not really need. This is especially true if you are one of those people who have the habit of unconsciously spending money on products that are not necessary. And even if you get them, the item not being in your list will make you stop and think about the purchase before you make them. 

These may be simple ways towards debt management and you can sure that they are effective! 

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