You probably have entered into debt because you have been gradually but regularly accumulating expenses, or because you have made a necessary expenditure of late which is not regular but which ate a big part of your available fund, like buying a house, a car, a holiday etc. It may also be caused by unemployment in which case you will need to buy basic essentials including foods. These two scenes cannot be avoided in life as they are part of the three motives for holding money (speculative, transactionary and precautionary). Whether you have accumulated your debt over a regular time, due to small expenses or sudden large expenses, it is necessary you follow the rules below to manage your debt to a bearable level. If you have accumulated debts, how do you plan for unseen contingencies in your life? Remember, life is a pool of risks.
1) Stop incurring more debt
The first principle of debt management is halting any further debt incurement. If you realsie that you have been in debt, and you are sad about it, the first measure is to stpo buying things. Instruct whoever is supplying with grocery or those that have been invoicing you based on your credit line to stop immediately. You cannot come out of debt if you continue to pile more no matter how important the expenditure is. No expenses is necessary when you are in debt or else you will be bankrupt!
2) Review your credit profile
The next measure is for you to review how you have been spending by looking at your previous expenses. You may do this by checking your credit card statement or by checking all your receipts and storming to remember all the unreceipted expenses made and you will come out with a total of your expenses for say, a week, two weeks or a month. From your lists of expenses you will find out that there are two possible divisons you can categorise them into. Thes are necessary and unnecesary expenses. Draw a table and list the expenses that are necessary on one side and those that are unnecessary on the other side. Things like food, clothes, house rent, fuel, drinks, newspapers etc, are necessary while things like beers, chocolate, films, wrist watch etc are secondary. From your list of necessary expenses, you should priotise by considering food first before house rent and fuel for your car if you have one. Check your expenses and found out if you can accommodate the crucial items that are necessary for your living. After accommodating the crucial expenses, you can go for the next on your list of priorities if you still have fund left.
3) Pay your debt
Your debt will not go if you fail to pay it. Pay your bill as much as you can. Always pay more than the minimum required by your creditors so that you can reduce the balance of your credit. The smaller your credit, the smaller the interest paid by you. If you are not buoyant enough to pay your bills regularly it is better you negotiate with the creditors or service providers in advance than to miss payment. If you tell them good reasons why you may not be able to pay and give reasonable time to pay, they will surely cooperate. You acn also renegotiate your interest rates with your creditors if you have good reason or ask for interest break because of unemployment.
4) Look for extra income
You can look for extra income by doing extra jobs or selling some old things in your house which are lying fallow but which you do not need anymore. There are also some things you are using but can do without, like your ipod, laptop, camera, going to cinemas, aloholic drinks etc. You shall look at all those items that you have mistakenly bought when you have money and dispose them when you do not have. You can look for part time work at the weekend or you off-duty day to meet up your extra expenses that cannot go off your list.
5) Compare rates
If you are owing bank A the sum of 2,500 at the rate of say 15% per annum and bank B is ready to charge you 14.5% for the same facility, it is better you transfer your loan from bank A to bank B so that your burden can be reduced. In doing this make sure you find out about the new bank transfer fee and read their small prints before you sign.
6) Cut your bills
You can actually do away with not calling except when it is for business or when it will generate income for you. Let people know you in debt by reducing your calls. If they are truly your friends, they will surely call you when they have not heard from you. You can call your phone service providers and ask them to block your calling facilities for the main while so that you can retrace your steps. You can also change the payment sytem of your mobile phone from contract to pre-paid.
7) Retrace your steps
The last but not the list in managing your debt is retracing your steps. You should know that if you have self control, it is possible to live without debt. Do not buy things when you are not sure of how to pay. Do not jump at credits as a way of life. Do not see things as necessary for your living except by not consuming them you will die. If you think you have to buy everything you need, you would not know when to stop. There is no luxury made on earth that is not necessary for living. They only become unnecessary if you cannot pay for them. If you think buying an expansive phone with camera is necessary for you, why will you think buying a yatch is not necessary as well? If you think you cannot do without drinking alcohol everynight, some people drink 3,000 per bottle whisky every night before they sleep. Do not buy things because they are good, to impress or satisfy your acquisitive urge, but buy whenever you can pay.
Remember that as human beings, we are unnecessaraily acquisitive and do not know when to stop buying things we are obssessed about until we run into problems. Remember that it is better for you to have good savings than to have the whole of material things. Debt is a 'can of worms' that you should do away with as much as you can.