Discipline Can Help To Manage Personal Debt
Personal debt can grow at an alarming rate if you are not careful in its management. Unless you take care to live within your known sources of income, the debt can put you into difficult circumstances that can even lead you to contemplate bankruptcy. How then, can you take charge of your finances and manage your personal debt?
Assess Your Situation
The first thing that you need to do when you find that things are going out of control is to make a complete dispassionate assessment of your current situation and all that it adds up to. For this, you must first realize that you are in poor circumstances and do need to do something about it.
Make a list of all the money you owe, the interest you are paying and the monthly outgoings that you are making to meet these debts. Get your latest credit report and credit score. Then list out your known sources of income, and be very realistic about this. Do not make any assumptions of likely income based on expectations, but base it on what you definitely know you are going to make.
Then compare this with your debts and likely monthly commitments and see whether you are left with any surplus at all from all this, after you have met your known expenses. List your living expenses and see if there is any possibility of economy in any of these.
Change Your Lifestyle
One of the first things that you need to do, if you are serious about managing your difficult financial situation, is to keep away all your credit cards. Learn to manage your daily expenses with the limited cash that you have at your disposal, and stop spending on things that are not really necessary. Do not avail of any line of credit, that a store or other establishment may offer you.
Prioritize your debts and start by paying off those that have a higher interest burden. Do not get tempted to go in for the latest gadgetry, just because others have it. You have managed so far with whatever model you have, and just need to continue to do so. If you must have the convenience of a card, go in for one that is prepaid and has a limit. You will automatically be more careful in its use, and this can help to ease your financial crisis.
Managing debt is simply a matter of living within your means, and not on future income. Do so scrupulously, and you will soon find that you have a lot of peace of mind, not worry about owing money, and yet content with what you have.
