A person’s financial situation can say a lot about someone. It shows how a person is able to handle financial difficulties, ability to effectively manage their income, their debt management, how much they can save, and even if they invest. Knowing how to do all these things are crucial for future success in becoming financially independent. Unfortunately, more than 45 million Americans are in debt right now, all with different circumstances. That’s a lot of people carrying a universal stressor. Here at True Sky Credit Union, as much as we want to, we can’t clear everyone’s debt, but what we can do is teach people how to manage debt. So, without further ado, let’s jump into 10 tips for debt management.
10 Tips for Debt Management
1. Reduce the number of credit cards you have
This tip might seem a bit obvious, but more people fall into the trap of qualifying credit cards that are sent in the mail as bait. Consider only keeping 1 or 2 credit cards to better manage your debt. When going through your credit cards, make sure you keep the ones with the lowest interest rates.
2. Check your bills carefully
Humans make mistakes–machines make mistakes too. Whenever you receive a bill, statement, or other financial document, always always always make sure they are correct in billing, rates, and anything else that might require a change in your budget.
3. Pay your bills in full and on time
High interest rates are sometimes what sinks someone’s financial situation. It’s important that you pay your bills full and on time. We get that not everyone is able to pay their bills in full. If that’s the case for you, then the best thing to do is to at least pay the minimum amount due for that month to avoid having to pay more interest fees.
4. Don’t take on more debt than you’re already in
If you’re already in debt, then don’t bury yourself deeper by adding more debt. Working towards paying off the debt you already have is hard though, especially lately with all the inflation. Do the best you can to avoid unnecessary purchases.
5. Look for the best interest rates when consolidating your debt
Not everyone consolidates their debt, but if you are looking to do this, make sure you get all the details of whatever plan you choose. Most people get a debt consolidation loan from their bank or credit union instead of having several different lenders. For example, here at True Sky Credit Union, we offer low interest rates because we aim to help you get out of debt, not put you further into it.
6. Pay off your high interest debts first
We briefly mentioned this is tip #1, but paying off debts that have the highest interest rate first will reduce the amount of debt in your name in the long run.
7. Develop a budget to track your expenses
We have said before but we’ll say it again: CREATE A BUDGET–AND STICK TO IT! Sticking to a budget not only can help you get out of debt, but it is also a good way to see what exactly you’re spending your money on. If you are more aware of where you are spending your money, you can be more mindful about spending habits, reducing unnecessary expenses.
8. Stay vigilant
Once you have paid off your debt, (WOOOO!) that doesn’t mean you are off the hook. Unfortunately staying out of debt is a lifelong, universal practice that only gets easier with time. Consider getting rid of your credit cards and only debit cards or cash, and also a good practice is to never spend more than you earn.
9. Speak to a credit counselor
We know better than anyone that finances can oftentimes be overwhelming when dealing with it alone. If you need help developing a budget or a debt relief plan, then reach out to a credit counselor. Talking with a professional financial consultant can help alleviate some of your financial stress.
10. Contact your creditors about payment plans
Speaking directly to the companies that you owe money to could lead to an easier repayment plan. They might be able to set up a repayment schedule that works for them and you.
True Sky Credit Unions Knows Debt Management
In the grand scheme of things, running from debt is not something anyone should live their life doing. Getting into debt is so much easier than getting out of debt. If you currently have debt or have gotten out of debt, we would love to hear your journey to financial success so that maybe someone else could benefit from your example. True Sky Credit Union wants to help you in any way we can to get yourself out of debt. Check out our website to view our rates, credit builder program, auto loans, home loans, personal loans, and other resources at your fingertips. We have multiple locations that are all full of financially intelligent employees who will guarantee to help you to the best of their ability. Give us a call, make an appointment online, or stop by in person to start your journey of debt recovery.