Three Rules for Debt Management

Debt can be overwhelming and lead to financial ruin for many people. It can cause poor credit scores, bankruptcy and other financial problems that affect all aspects of someone's life. For this reason, proper debt management is key to financial survival. Not only can it ease the strain of insurmountable debt loads, but it can also result in better credit and access to larger purchases, such as a new home or car.

Pay Bills Early

Even if you pay your bills, you may be socked with excessive late charges and miscellaneous fees if you don't pay them on time. This can, in turn, put you even deeper in debt. To avoid this, pay your bills early to ensure that you don't end up paying more than what you actually owe. You can even pay your bills at least two to three days early just to ensure that the payment has processed by the due date and your creditor can't try to charge you anything extra.

Get Organized

You can't know how deep in debt you are until you organize your finances. Take some time to write down every debt you have and what the total amount of the debt is, including late charges and any associated collection fees. Then, make a list of your income, tallying up all money coming into your household. Once you have a basis of comparison for how much is coming in versus how much is going out, you can then figure out how to pay off debts and where you need to make some changes, financially.

Get Help

Don't wait until you are too deep in financial crisis to get help with debt management. If you cannot do it on your own, there are numerous reputable debt counseling agencies available that can help to get you back on track. But don't wait until it is too late or you are extremely deep in debt. At the first hint of trouble, seek assistance.

Significance

If you let your debt go, then you may find yourself in deeper trouble financially than you might have been if you tried to work with your creditor on a payment plan. Don't ignore the calls and letters; instead, explain your current financial status and see if there is some way to work out what you owe in a payment plan until you can catch up your account.