Dordetara Personal Finance Association

Managing Debt

Everyone knows about debt and most people have some sort of debt; whether it be a car, home, or credit card, though it is common to have all the above and even more in many cases. However, it can get to a point where it just seems like you are working to pay each month personal loans for bad credit that are seemingly to never end. However, that’s often just the sign to say you need a new way to manage the debt you have, and start to eliminate or, at the very least take a much different approach to the debt you have.

debt-managementIf you feel like you are just making it by no matter what your paycheck says, then it is defiantly time to reevaluate things. When you make the decision that something has to change the first thing to do is look at where your money is going and, that means more than just writing down all your monthly bills. Where does your money really go? Is going out to eat lunch everyday instead of taking it to work slowly draining you or are those shopping sprees of the sale rack or whatever it may be you can’t seem to keep yourself from buying every week? After figuring out where all of your money goes then it is time to start looking at the debt and how much do you really have. What is the pay off for all the loans and credit cards?

Finding that out, many times can be both an eye opener and a shocker as many don’t realize how much debt they have gotten themselves into. However, though that may be something that makes you feel discouraged and like you have gotten into a bottomless hole, it is important to remember that is defiantly not true but everything does take time.

Debt management

However, once you realize where all your money is going and what the loans are, then it is time look at the interest rates of each loan to see how much you are actually paying towards the pay off and not just the interest. If you have several loans with high interest rates, it may be time to consider refinancing in order to be able to get a lower interest rate.

However, what you do want to watch out for it getting a better interest rate but longer amount of years because you aren’t wanting to pay even longer even though if that did happen you would just want to keep making the same monetary amount in payments that you do now, in order to pay it off faster than the loan term and get the same benefits.

But, in most cases you should be able to get a lower interest rate for a lower amount of years for about the same amount of money each month that you are currently paying. But it is going to take more than just a few basic moves of knowing where your money is going to get you out of your rut. You may need to make some simple changes in your budget that you may not even notice.