There are a number of ways in which a consumer can keep their debts safe and in turn secure the safety of their income. No consumer wants to worry about their debts and struggle to keep track of them at the end of the month; therefore it is important that a consumer always remains aware of exactly what is happening with their debt.
Firstly a consumer should sit down and make a list of all their debts including the outstanding amount and the minimum payment. Thereafter they should calculate what the entire amount of debt repayment is every month. This way they will have a lump sum to deduct from their budget immediately and know exactly which percentage of their income goes toward debt. By updating the list every month a consumer will always know how much they owe and to whom.
If a debt is nearing its end, and there is a minor amount left due, it is better to bite the bullet and settle it immediately. The sooner and faster a consumer pays off a debt, the sooner they can free up income to put into a savings account instead.
Lastly it is important that consumers pay their debts on time, as this will prevent late payments from reflecting on their credit histories. There is no real ‘grace period’ after the due date of a debt, and as soon as payment is late it is recorded. Penalties and interests can also be added on late payments, and subsequently cost the consumer more than it reasonably should.
If debts have spun out of control and a consumer is no longer able to afford their monthly payments, it may be time talk to a debt counsellor. Debt counsellors can help negotiate with creditors, restructure budgets and assist consumers with expert debt advice.
Article written by: Andrea van Tonder 06-2013