Sunday, July 13, 2008

Define Debt Control

Define Debt Control

Debt control refers to your being able to handle your debt load. When you cannot pay all your bills every month or can only pay the minimum on your credit cards, you are not in control of your debt. You can achieve debt control, though, if you work at it.

Keep Track of Spending

    When you use a credit card, it is easy to lose track of just how much you are spending. If you are surprised every month when you get your statement, you might want to keep a credit card transaction register, similar to those people use when they write checks.

Budget

    Know how much you could charge on your credit card each month after your regular bills, such as your mortgage or rent and car payment, have been paid. As soon as you reach that amount, put your credit card away.

Snowball Method

    The snowball method involves figuring out how much you owe on each debt and paying the smallest debt off first. (Keep paying the minimum on your other debts.) This helps motivate people when they can check a debt off their list.

Avalanche Method

    Under this method, you pay off the debts with the highest interest rates first. This approach is mathematically superior to the snowball method.

Cut Expenses

    Cut out unnecessary expenses when you are trying to pay down debt. This includes small things such as making your lunch instead of buying it. Put away the money you save, even if it is just $5 or $10 and apply that toward your debt.

0 comments:

Post a Comment