Tips For Managing Your Personal Debt

Tips For Managing Your Personal Debt

Struggling with your finances? Got loans, credit cards, and overdrafts that are draining all your hard-earned cash through interest and fees? Then you need to stop, take a step back, analyse your situation, and carefully plot a course that will take you back into the black.

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Where There’s A Will…

It might not occur to people who are heavily burdened by debt, and find themselves busied by constantly having to work out ways to rob Peter in order to pay Paul, but no matter how bad one’s financial situation, there is always a way out of it if careful planning and prudent spending are employed.

Managing your personal debt in a logical, step-by-step fashion will enable you to resurface from the financial wilderness and begin living a relatively stress-free life again. Sound good? Then here are some measures to take, set out in stages, to help you along your way.

Stage 1 – Reduce Your Spending

Of course, this goes without saying, but it is certainly easier said than done. The most efficient way to do this is to construct a weekly budget, in which every expenditure is carefully analysed and planned for, and then do your very best to stick to it. Getting your budget down will then free up extra cash for the next stage of the process…

Stage 2 – Begin Reducing Your Debts

Use the spare cash you pocket each week to begin paying off your debt. Simply meeting minimum repayments means you will end up paying more in interest, so make sure you’re paying off as much as you can. If you have a number of different debts with separate creditors, ensure you concentrate on paying off the ones with the highest interest rates first to make sure you pay the least you possibly can over the long term.

Refinancing Options

You can also look at refinancing options such as moving credit card balances to new cards on 0% interest deals. If you’re only stuck with a small amount of debt, such as constantly requiring wage subs and emergency loans, it may be beneficial to take out a short term loan from a reputable provider like They offer a range of loan options with competitive rates of interest if you only require some short term respite.

Larger Debt Repayments

If your debt is absolutely overwhelming, and, even after budgeting, you can’t afford to pay the minimum repayments, get in touch with a debt management agency, and they’ll help guide you the process of contacting creditors and rearranging your debt so that it is manageable (this is known as debt counselling, and is extremely advisable as the support you’ll receive will be greatly beneficial to your cause).

Having your budget all worked out will help you when rearranging your debt as you’ll be able to prove how much you can reasonably afford to pay.

Stage 3 – Stick To The Plan

Stick to your budget and your repayment plans, resist the temptation to borrow again, and before you know it, you’ll be debt-free and back on a level financial footing.

Try to stick to the budgeting methods you learned while ridding yourself of debt (although you’ll now be able to afford to loosen your belt a little) and begin saving a little each month. That way you’ll always have a cushion to fall back in bad times, meaning you’ll find it easier to avoid debt problems in future years.

After retiring from university lecturing, Wendy Lin set up her own private finance consultancy firm. She has a passion for helping people be debt-free and settng up business finances.


  1. These are very good tips, thank you very much! I heard that you should use 10% of your income to pay back your dept. What do you think? Is that appropriate or to much?

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