Ways to Manage Your Debt

Debt is a common problem.  With the relative ease of getting credit cards and easy financing for purchases, one can easily get blindsided by debt.  As a young college student, I found myself in over my head in debt.

I spent freely with credit cards and used financing to purchase items that I didn’t need.  One day I woke up and found myself deep in credit card debt and sweating over how I could get my finances back in the black.

I was so far in debt that I started having trouble making my minimum payments and I fell behind.  This resulted in a lower credit score that affected me for several years after.

I was able to contact my credit card companies and negotiate some payment plans so that I could make affordable payments and clear off my credit card debt.  I also had to learn strategies for planning out my finances and managing my money better.  I learned many lessons during that time.

I learned that you must face your problems.  If you are deep in debt, the faster you start to work it out, the sooner you are repairing your credit.  It’s not the end of the world.  I was able to clear my debt and repair my credit.

Quite often your creditors will work with you if you contact them and explain your problem.  They would rather work out a payment arrangement than see you default on your debt.  It’s surprising the amount of discretion that the creditor is allowed in negotiating a payment arrangement.

One of the things that I had to do to start climbing out of debt was to stop using credit cards.  I essentially froze my credit and concentrated solely in paying off my debt, not creating any new debt.

Using cash was the best way that I learned to take control of my finances.  If I stuck strictly to cash, I was able to ensure that my budget always balanced.  I gave myself a set allowance in cash at the beginning of the month.  That would have to cover all my expenses.  When I started doing that, I really had to think whenever I spent any money.

Once, I paid off all my debt, I made sure to plan out my monthly budget and was much more careful about living beyond my means.

I was lucky that I was able to manage my money and debt on my own.  I contacted my creditors myself and negotiated my own payment plans.  I didn’t have to turn to other debt management solutions, such as declaring bankruptcy.  However, there are a number of solutions available.  I know that it can feel bleak, but it’s not the end of the world.  The worst thing to do is to ignore the issue.  Confront it head on and start taking steps towards solving your debt problems.

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Richard is a full time professional, husband, father and blogger juggling all the responsibilities of life and running a blog. Richard enjoys writing about life and online money matters.

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