It is harder than ever to build positive personal finances and to move away from personal debt. We are all facing the squeeze with the economy. If you are having trouble with your personal debt however, all is not lost. There are countless ways in which you can approach your personal debt and to slowly and methodically remove it from your life for good.
There are many different ways in which you can acquire personal debt. You might owe a family member or friend money on a personal basis. You might have taken out a personal loan through your bank, and you might have multiple credit cards, store cards, payday loans, and other forms of personal finance and short-term loans that are starting to build up and look insurmountable to you.
You have a few options open to you, including consolidating your debt into one lump sum that you tackle with a higher single monthly payment and one place to manage you interest and debt rather than multiple. Another option is to look at all of your debt individually and to come up with a plan of action to tackle them all.
Let’s look at how you can tackle your debt one by one and come up with a carefully considered plan of action.
For some people consolidating debt into one big lump sum of debt makes the problem appear much bigger than it actually is. Instead they would prefer to look at all the individual debt and bring it down in smaller batches. The first thing to do is to write down an extensive and detailed list of all of your debt on one piece of paper. Include all outgoing and the dates of repayment on each. It could be that you have £75 left on a store-card, and you are paying back £7 per month, or you have a large credit card bill where you are barely making the minimum payment each month.
Look at this list of debt and through personal choice decide whether to tackle the smaller debts first or the larger debts. Some people prefer to bring down the smaller debts first, bringing about a positive habit and a positive reinforcement of your belief in having the ability to remove debt from your life. Other people prefer to look at the bigger debts and to tackle those first, removing the headache of the larger interest before moving on to the smaller amounts that will suddenly appear so much easier to remove after the trouble of the larger debt.
It is purely down to personal choice which route to take, but be aware that with a positive approach to either route you can quickly have an impact on your debt. Wherever possible make a point of paying above the minimum repayment amount on your lines of credit, this will help to reduce overall interest on your debt and help you feel much better about the positive movement you are making on the debt as a whole.