Wednesday 30 May 2012

Debt Management Tips and Plan


Debt Management is a strategy for a debtor to handle his debts. A Debt Management Plan is a contract between a debtor and creditor that helps reduce unclear and unsecured debts over a fixed period of time to help recover control of your finances.

A Debt management plan helps you in dealing with your debts in an effective way. In this post I am about to discuss some tips that you can use in your debt management and to make a good debt management plan.

Tips for Effective Debt Management:

Debt Management Plan
Debt Management Plan
  • Stop using Credit cards: Credit cards are the most common source of your debts. So avoid using them is you want to cut down your debts. Try to use debit cards instead of credit cards.
  • Budget Record: Maintain record for your entire budget including your spending, earning, credits, loans, etc. This will help you later in settling your debts and budgets and you will also be able to determine whom you have to pay how much.
  • Debt management plan: Make a good plan to manage your debts. List down your spending and decide on how you can reduce them so that you can pay some part of your debts on regular basis.
  • Alternative ways: Also look for other ways you can find for earning such as secondary income, selling your possessions, or help from a friend.
  • Save Money: It is the most obvious and common way of settling your debts. Cut down your spending as far as you can, avoid the use of credit cards, save money for future.