Some things you need to know about managing debt:
To manage debt effectively means to use it appropriately and if you are carrying debt from one month to another you are probably not using it appropriately. Debt should be used as a short-term arrangement to facilitate some improvement in lifestyle – such as the acquisition of an asset that you cannot afford without financing.
Some people are now buying cars financed over terms up to nine years! Think about that – the last payment will be the same as the first but you will also be in the expensive repair zone when you make the last payment. Perhaps you are buying something you simply really ought not buy!
How about credit cards, are you paying your balances off regularly? If you have ever used one from of credit to make a payment on another you are probably in trouble. Credit cards and lines of credit are referred to as “revolving credit” – the idea is that you run them up in an emergency then pay them off.
A problem arises when balances on credit cards and lines of credit are carried from month to month and especially when the balances grow from month to month. Bankers love to see you in debt, that is the product they sell – debt! And business thanks (most likely) to you is brisk.
You are only actually “managing debt” if you are paying your bills on time out of your regular income and reducing your balances month over month. If you are using debt to pay your debt you should be coming in for a chat.