Posted on: 7 October 2015Share
Most people are in debt and constantly striving to balance the amount of money they pay towards their debts each month versus the amount of income they have. Some people fall into the trap of debts with high interest rates or a higher debt than they make each and every month. Here are some debt management tips that you can employ to help you manage your financial affairs.
Consolidate High Interest Debts For Lower Interest Rates
Most people who are in debt over their head have various loans with high interest rates. You can go to a bank and look into the various options about consolidating high interest loans and rolling them into one loan with a lower interest rate. By consolidating multiple debts with high interest rates into a loan with a lower interest rate, you could potentially save hundreds or even thousands of dollars per year in interest. Calculate the amount of money that you are saving in interest and then take that amount and apply it directly onto the principal loan amount to help you pay down the debt faster.
Call Credit Card Companies And Inquire About Lowering Your Interest Rates
Credit card companies always want your business, and they will work with you to lower your interest rate if they think they are in danger of losing your business. For credit cards that have high interest rates, call into the customer service line and ask to speak with the cancellation department, and let them know that you are shopping around for a lower interest rate. Let them know that you if you find another card with a lower interest rate you are going to transfer the full balance, and they will most likely work with you to lower your current rate. Keep an eye out for entry level credit cards that offer low rates for six months or a year and take advantage by transferring balances between cards.
Start Tracking All Your Spending
Having a book that lists all of the money being spent on a monthly basis will help to show you exactly where your money is being spent each month. Create a financial diary and record each time you spend money each day, from the coffee you buy on the way to work to the pack of gum you bought at a corner store. Categorize each purchase by the type of expense, such as travel, entertainment, or food. Then, at the end of the month, tally the purchases and compare them to the amount of income you have coming in to find out where you can save a few dollars each and every month.
If you find yourself in financial trouble, the best thing you can do is sit with a financial expert that specializes in debt management to do an overview of your finances. If your circumstances are dire enough, you may need even need to speak with a debt defense attorney.