Debt Advice - 8 Tips for Paying Back Debt

  1. A great way to begin paying back debt is to keep a list of all the debt you owe. Once you have it down on paper or on screen you can easily see what debt you really have to pay back. Having it in black and white can really help you realize how much debt you really have, rather than what you think you have.
  2. Prioritize your debt. In order to make sure you are paying back debt effectively, make a list of the most important debt that needs paying back. Paying back debt like utility bills and house and rent payments should take priority over paying back debt on credit cards and store cards.
  3. Start a budget. Make a list of all your incomings and outgoings. Make a spreadsheet or do it on paper, and then work out how much you have left over each month. Whenever you spend anything, add it to the spreadsheet to see how much you have left for paying back debt or other expenditures.
  4. Save money. Take a set percentage of your income, and put it in a separate account to the one you are paying back debt with. Saving even a small percentage like 10% builds up quickly and will give you some extra spending money, or some money to put towards something in the future.
  5. Contact your creditors. Let them know if paying back debt at the rate they want isn’t possible. Talk to them, often if you can agree to a guaranteed payment to them every week or month, they make take an offer as low as $5 a week, as long as they know the money is coming in.
  6. Respond to your creditors. Don’t just ignore paying back debt, let them know what is going on, as with tip 6, talking to them will not only help you to remember that you have debt to pay off, but will also keep the creditors happy as they know what is going on.
  7. Don’t borrow more money for paying back debt. If you can’t afford payments, try and work something out with the banks, unless you really can’t work out a better deal for paying back debt, you should avoid borrowing money as much as possible. It will only make the overall situation worse and drag out the time it takes to pay back your debt.
  8. Consider contacting a Debt Consolidation service as they can often talk to banks on your behalf, and cut down your payments. A lot of them will also turn all your payments into one payment, making it even easier to keep track of paying back debt. Be careful while choosing a service, as some may charge you for the service, so try some of the methods mentioned before taking this step.