Debt review is a relief process for most debtors as it helps them manage their debt better through making single affordable payments until their debt is complete. The debt review process is quite thorough in terms of addressing financial issues.
It is facilitated by a debt counselor. The following are some of the things you could learn from your debt counselor in order to avoid landing into crippling debt again:
One sign of being in bad debt is when you do not know whom or how much you owe. Ensure that you always have a list of all your debts and creditors. This list should contain important details such as the amount due, the date that it is due and the kind of monthly payments you need to make.
Late payments attract penalties and disrupt the financial balance that is necessary between income and expenditure. It becomes harder to pay off an amount that is more than a month overdue.
When finances are tight, always try to make minimum payments on your bills. Growing debt arises from bills left unpaid. Minimum payments do not clear your debt but they prevent it from growing.
Every individual should always have an emergency fund from where to can pull out a lump sum of money when needed. Work towards creating an emergency fund of at least $1,000.
Spending without a budget can be very dangerous since there is always the risk of overspending. Keeping a monthly budget helps you to know how much your need to spend, save and use to repay your bills. A budget will also help you to determine how to spend extra money, which often goes to waste.
In case you have tried all the above but are still suffering financially, it is advisable ask for assistance from professionals such as debt counselors. They can help you to determine your level of debt and plan for repayment as well as budget for your monthly expenditure.
BIO
Rachel Johnson is a debt counselor who has worked in debt review for many years. She speaks more on debt review and learning to manage your own debt on her blog. Click here to know about your credit reviews.
Keep track of your debt
One sign of being in bad debt is when you do not know whom or how much you owe. Ensure that you always have a list of all your debts and creditors. This list should contain important details such as the amount due, the date that it is due and the kind of monthly payments you need to make.
This list should be your point of reference when paying your bills at the end of the month so make sure you regularly update it.
Always pay your bills on time
Late payments attract penalties and disrupt the financial balance that is necessary between income and expenditure. It becomes harder to pay off an amount that is more than a month overdue.
With the new age of technology, you can use your Smartphone to create a calendar with reminders for when your bills are due.
Make minimum payments
When finances are tight, always try to make minimum payments on your bills. Growing debt arises from bills left unpaid. Minimum payments do not clear your debt but they prevent it from growing.
Prioritize your debts properly so that you can make minimum payments on the debts much lower on the priority list.
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Start an emergency fund
Every individual should always have an emergency fund from where to can pull out a lump sum of money when needed. Work towards creating an emergency fund of at least $1,000.
The emergency funds reduce the chances of you tapping into your salary and getting salary advances, which may affect your bill payment schedule.
Create a monthly budget
Spending without a budget can be very dangerous since there is always the risk of overspending. Keeping a monthly budget helps you to know how much your need to spend, save and use to repay your bills. A budget will also help you to determine how to spend extra money, which often goes to waste.
Ask for help
In case you have tried all the above but are still suffering financially, it is advisable ask for assistance from professionals such as debt counselors. They can help you to determine your level of debt and plan for repayment as well as budget for your monthly expenditure.
Debt counselors will also help you to get reduced penalties and interest rates when paying off outstanding debt.
BIO
Rachel Johnson is a debt counselor who has worked in debt review for many years. She speaks more on debt review and learning to manage your own debt on her blog. Click here to know about your credit reviews.
