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Keep debt from spiraling out of control

| January 03, 2016
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Finances

Is your debt load straining as the traditional season of giving stretches on? Some kinds of debt are considered "good," such as the mortgage on your home. Other kinds – not so much. Here are suggestions for managing your debt.

  • Stop piling on. A mountain of debt will only continue to grow if you keep adding to it. Watch your spending and take a hard-line approach to new purchases.
  • Get a clear picture of all your debts. Put the data in a spreadsheet or other easily accessible ledger. Your credit history report can get you started with a listing of your outstanding accounts.
  • Create a payment calendar. Get familiar with due dates. Use your smartphone or other technology to provide reminders.
  • Make payments on time. If you miss a due date or skip a payment, you'll get stuck with a late fee in addition to what you already owe. Don't make a bad situation worse.
  • Give 'til it hurts. At the very least, pay the minimum amount required. If you can stand the pain of paying more, you'll save time and money over the long haul.
  • Prioritize your debts. Does your credit card charge sky-high interest rates? Pay that balance down first by putting any additional amount you can afford toward the principal. Devise a system for identifying and paying the debts that cost the most.
  • Set up an emergency fund. Although you'd like to use excess cash to pay off debt, you also need some "wiggle room." Stash away funds so you can avoid adding to your debt if an emergency occurs.

Without good oversight, debt can quickly spiral out of control, leaving you feeling powerless. Give us a call for more money management techniques that will work for you.

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