Over the past few years, I have been struggling with my finances quite a lot - so I took it upon myself to improve my debt management skills.
I read about how to improve my debt management skills in a magazine a while back, so I decided to dig the article out and give the advice in it a go.
I have been working on my skills for about 5 months now, and I can happily confirm that my overall financial situation is looking a lot better than it used to. So, I am going to share a few tips with you about how you could improve your debt management skills too.
1. Create a strict budget
This is the very first thing I did. I sat down (for a few hours) and wrote down everything I earned/received each month (including my benefits). I then jotted down everything I spent each month on essential expenses (in other words - utility bill payments, mortgage/rent payments, etc.).
After I had these two amounts, I could clearly see an overview of my finances. I could see how much money was coming in and I could see how much money was going out.
I then subtracted the amount I spend from the amount I earn, and this left me with a figure called my 'disposable income'. This was the money I had available to pay towards my credit cards, store cards and unsecured loans - in other words, my unsecured credit - and (if there's anything left) to spend on things I don't really need.
2. Figure out if your budget will cover the costs of your unsecured debts
After I had this disposable income figure, I then totalled up the amount of money I spend on my unsecured debt repayments each month and compared the two amounts. Luckily, the money I was left with was just about enough to cover the cost of my unsecured debt repayments.
But what if it wasn't? what would I do if I couldn't afford my debt repayments? These questions scared me a little, so I made a point of improving the way I handled my finances.
I read about how to improve my debt management skills in a magazine a while back, so I decided to dig the article out and give the advice in it a go.
I have been working on my skills for about 5 months now, and I can happily confirm that my overall financial situation is looking a lot better than it used to. So, I am going to share a few tips with you about how you could improve your debt management skills too.
1. Create a strict budget
This is the very first thing I did. I sat down (for a few hours) and wrote down everything I earned/received each month (including my benefits). I then jotted down everything I spent each month on essential expenses (in other words - utility bill payments, mortgage/rent payments, etc.).
After I had these two amounts, I could clearly see an overview of my finances. I could see how much money was coming in and I could see how much money was going out.
I then subtracted the amount I spend from the amount I earn, and this left me with a figure called my 'disposable income'. This was the money I had available to pay towards my credit cards, store cards and unsecured loans - in other words, my unsecured credit - and (if there's anything left) to spend on things I don't really need.
2. Figure out if your budget will cover the costs of your unsecured debts
After I had this disposable income figure, I then totalled up the amount of money I spend on my unsecured debt repayments each month and compared the two amounts. Luckily, the money I was left with was just about enough to cover the cost of my unsecured debt repayments.
But what if it wasn't? what would I do if I couldn't afford my debt repayments? These questions scared me a little, so I made a point of improving the way I handled my finances.
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