How Do I Manage Debt?

The question of "how do I manage debt?" is pretty common these days. In a tight economy debt can easily get out of hand and getting it back under control is tough. There are a variety of ways to manage your debt depending on how much debt you have, how much income you have, what other living expenses you are responsible for and what you're willing to do. In some cases if you're in over your head it might be time to talk to a financial consultant about debt consolidation, but there are steps you can take yourself to begin with.

How Much Debt Do You Have?

The first step is to face how much debt you have in black and white. Write it out. Interest included. How much are you paying a month on loans and credit cards? Okay, that wasn't too too bad was it?

How Much Income do You Have?

Do you have a stable income? Does it fluctuate from pay check to pay check, season to season? What are your month to month living expenses. Items such as rent, gas, utilities and groceries. The amount it takes you to live each month, keep that as a separate amount. Average it out, look at last year's tax return if that will help, to see what you can expect to have on hand monthly to deal with your bills.

How to Manage the Debt You Have.

Its a pretty simple formula; income minus living expenses equals "disposable" income. How you manage your disposable income is how you manage your debt. Look at the interest rates you have on your loans or credit cards. Is one very high? Can you roll the amount over to a lower interest? Is it worth while to try and consolidate those loans so you only have one payment? Take a look at your living expenses. What can you do without? Can you do without all the bells and whistles on your phone or cable TV plan? How much more a month would that give you to put toward your debt? Look at your income. Is there a way to increase it? Can you pick up more hours or a second job for short term? When you ask "how do I manage debt?" you also have to ask what you're willing to do to get it under control.

About this Author

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