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In an ideal world, none of us would have any debt and would, instead, concentrate on building up our savings, investment, and pension funds. In the real world, however, nearly all of us find ourselves needing to take on some debt at some point in our lives.
Debt management is about minimizing the amount of debt that you need to take on, and the length of time that it takes to pay off the debt.

Debt management tips:

1. Change mortgage provider
Your mortgage is probably your biggest debt, but many of us never bother to review whether we're getting a competitive deal! This is particularly dangerous where an initial discount rate expires, leaving you exposed to the bank's standard variable rate for the remainder of the term. Make sure that you review the rate that you're getting. If it's uncompetitive, switch to a better deal.

2. Sort out your credit cards
- Get rid of surplus cards. One card should be sufficient, and having additional cards just increases the temptation to overspend.
- Be a rate tart. Rate tarts are people who regularly switch credit card provider to make sure that they are benefiting from good rates.
- Pay off as much as you can afford each month. Credit card companies only require you to pay off a minimum amount every month. However, this is a very costly pitfall, as you'll be paying interest on interest.

3. Consider consolidating debt into a personal loan
If you have a lot of debt on credit cards / overdrafts, then you may benefit from consolidating it into a personal loan. Loan rates tend to be much lower, so you'll see a reduction in your monthly payments. It will also get you into the habit of making regular repayments, whereas credit cards and overdrafts encourage a mindset of spend today, pay back sometime!'

4. Get an authorized overdraft
If you don't have an authorized overdraft, there's a danger that you will slip into the red and incur hefty charges. Having an overdraft provides a useful buffer. The caveat is that you need to view your overdraft as something to be used sparingly rather than an extension of your monthly pay packet!

5. Actively manage your debts through financial planning
To effectively manage your debts requires a degree of financial planning on your part. It can be as simple as setting aside half an hour each week to review your balances and check interest rates.

6. My final bit of advice is that if you find yourself unable to cope with your debt payments, seek advice. Your bank should be able to offer assistance on how to manage debt and what options are available to reduce the burden of your payments. Alternatively, there are lots of Internet forums that offer advice on managing debt, such as www.helium.com .

So, in conclusion, there are lots of simple things you can do to improve your debt position, and hopefully they will help you eradicate your debt.

Learn more about this author, Simon Wright.
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