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Thursday, December 10, 2009

Improve Your Debt Management Skills

If you are struggling with debts, and would like to feel in full control of your finances, you should consider improving your debt management skills.

Improving your debt management skills could allow you to:

• See exactly how many debts you have.

• See exactly how much you owe, and who you owe it to.

• See exactly how much you are required to pay towards your debts each month.

• See if you can actually afford to service your debts each month.

• Get a rough idea of when you should be debt free.

Improving your debt management skills can actually be pretty easy.

The first you thing you should do is create a budget. This should help you see exactly how much money you are earning / receiving each month, along with exactly how much money you need to spend each month. Knowing these two figures should give you a rough idea of whether or not you will be able to afford to service your debts each month (providing you know how much they will cost you).

To find out the exact amount of money you have available to pay towards your debts each month, you should do the following:

Total monthly income minus total monthly essential expenditure (mortgage/rent payments, secured debt payments, utility bills, food, etc.).

The amount you are left with is called your 'disposable income' - and as mentioned, this is the money you will have available each month to pay towards your unsecured debts, as well as spending on non-essentials and saving for the future, if you can afford it.

Creating a budget is just one of the ways you could improve your debt management skills.

In general, the sooner you take action to improve your debt management skills, the better. The earlier you address your problems, the easier they should be to tackle. If you simply leave your debts to grow and don't take action against them, they will probably get worse.
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Gexton on February 5, 2014 at 7:14 PM said...

This is an informative blog by which I have got that info which I really wanted to get.
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