Debt management should begin with rules that limit the occasions when credit can be used. Individuals with a lot of bills should consider consolidating them and enrolling in an automatic payment program. It can also be helpful to pay all bills at one time. The best way to make debt more manageable, however, is to get rid of it.
Managing debt can be simplified by developing a strict policy for acquiring it. People should avoid opening accounts or accessing credit for items that they have the funds to pay for. When funds are not available but credit is, it is best to carefully consider the urgency of the potential purchase. If there is time to save up for the item or there will be money available to purchase it in the near future, credit should not be used.
Consolidation can be an effective debt management strategy. Many people feel more overwhelmed by the number of bills that they have than they do by the costs of paying them. Lumping as many bills as possible together can be convenient and may even help to eliminate certain debts faster.
If given the option, individuals should try to set all payment dates for the same day. Many creditors will allow their clients to change their payment dates even after the accounts are established. If this is not possible, individuals can still set one or two days per month to pay their bills, even if doing so requires making some payments earlier than necessary.
Individuals with sufficient income should strongly consider enrolling in automatic bill payment programs. These allow payments to be withdrawn from a person's account without her having to take any action. Doing so is a good debt management tactic because it helps to make sure that creditors are paid on time. It reduces the need to remember different payment dates and the risk of late fees for forgotten payments. For the best results, individuals should consider having an account solely for this purpose so that it will be easier to analyze and track payments.
Elimination is one of the best debt management strategies. Many people remain saddled with debt for longer than necessary. In addition to the burden of remembering and adhering to payment terms, this decision can also be more costly. Financial professionals commonly advise people to avoid developing habits of making minimum payments. By paying off some debts early, a person will have fewer accounts to manage.