Author: Titus Hardin
Financial management can be very stressful for anyone that has a high level of debt or a number of creditors to pay off every month. Good debt can be a good thing, helping you to buy a house, a car etc. However, if your level of borrowing becomes excessive it can lead to many problems. If your debt has become intimidating, then one or more of these five strategies can help you to reduce your personal debt.
1. Financial awareness
The first step is to become aware of your income and expenditure every month. Most of us don't even know where our money is going. Without keeping track of your income and outgoing, you will not be able to work with a budget. Take out some time and make a list of payments that goes out of your account every month no matter how small. Let the list be as complete as possible.
2. Cut back
After making a list of your monthly expenses, you can now decide on the things you can reduce spending money on or even cut out completely from your budget. Cut down or cut out as many items on your variable expenditure as you can.Items like clothes, mobile phone, and trips. Another way is to sell stuff you can do without, gadgets and property that you hardly use. Selling of your unwanted stuff can make some quick cash that can be used to pay off debt. Once you start cutting back, you will start seeing more ways to reduce your spending.
3. Talk to your creditors
First, negotiate with your creditors. List all your creditors and call them one by one and ask for a reduction of your debt. Make sure you speak with someone with authority and get the agreement written and signed before making payments. A lot of creditors will agree to a reduction if you show good faith.
Debt consolidation combines all your small debts into one larger loan. This can reduce the number of repayments you have to make each month and cut back on the number of creditors to whom you have to pay interest. Look for debt consolidation loan that has lower interest than your average monthly payment. Don't go for a loan that simply lowers your payments by extending the repayment period. You might end up paying more interest over time than you would otherwise. If you own a home, a secured loan could be the ideal solution.
5. Credit counseling
Some people find it easier to have someone help then to handle there finances. Credit counselors can also show you how to better manage your money, and stick to a budget. They are better skilled at negotiating lower interest rates and payments from your creditors. They can also teach you the much needed skills of budgeting and money management. Reputable credit counselors are usually non-profit.
Check out the link below Debt Information Center to get more free information on debt management and consolidation.
Article Source: http://www.articlealley.com
About the Author: Titus Hardin is an entrepreneur and management consultant.