It may not be possible to completely eliminate debt from your life, especially if you have made important investments such as buying a home or pursuing higher education. However, the debt you have can be managed carefully so that you have better control over your finances. Ensuring that your debts are well-managed will also reflect positively on your credit health in the long run.
Here are 5 tips on how to manage your debt better.
1. Record Your Expenses and Make a List.
The best way to get debt under control is by analysing your spending behaviour and identifying all unnecessary expenses. For one month, record every cent you spend, including what you may consider minor expenses (like food or movie tickets). By doing this, you’ll be able to see clearly how much of your spending is fixed and how much is variable.
Next, make a list of all your debt obligations and the interest you’re charged for each. Put them in order of interest rate, from highest to lowest. Once you’ve done these steps, it will be easier to see where you can cut down on your expenses.
A good way to know more about your finances, credit health and credit score is to obtain and check your full credit report. For instance, a full MyCTOS Score report will give you comprehensive insight on all major areas of your credit health and let you know where you stand in the eyes of banks and lenders.