Manage Debt Before It Manages You

manage debt

The old saying goes that debt has its way of creeping up on us without us really even knowing it and this post will be about how to manage debt.  Now a days we are so quick to pull out our credit card or debit card to make a purchase.  To manage debt we need to really look close at what we are spending our money on and really track it.

It is important to keep debt at reasonable and manageable levels or we could end up incurring high interest rate charges. Even worse having barely enough money to pay the minimum payments on our credit cards.

Where Do You Turn For Help to Manage Debt?

The first course of action to manage debt is to look into creating a budget to track where your money is going, there are many free budget templates available online that you can use. Finding areas that we are spending frivolously we can explore to find any savings which will help us manage debt. Occasionally there are times when there just are more expenses than revenue that is coming in, maybe we have gone too far off the deep end and we cannot solve our debt by budgeting.

In Comes The Consumer Debt Management Professionals

Now that we have realized that we cannot tackle our debt problem on our own, we are in a situation where we need outside help. It is very hard to ask someone you know for help, especially for debt management help. If you don’t want to ask someone, you can always teach yourself by receiving an accounting associates degree which will help you take control of your finances for good.

If you do not gain control over your debts, there are many things that can be impacted by your negligence. Your debt problems could impact your credit rating, potential job opportunities might vanish, and even your health. It is important to manage your debt before it manages you and it is too late!

Manage Debt: Debt Consolidation or Credit Counseling?

Occasionally debtors will turn to a debt consolidation company thinking that they are the answer to their debt problems.  What typically a debt consolidation company does is they may transfer all your debt to a lower interest rate credit card or maybe tap some of the equity in your home to get money to pay off the consumer debt.  If you close the accounts that you had open in favor of the lower interest rate card you could actually negatively impact your credit report as you are raising your debt to available credit ratio.  If you do take this route keep the other credit lines open just do not use the credit cards.  Make sure that if you do tap your home equity you are not in any risk of default as the last thin you want to do is put your house on the line for your poor debt management choices.

Credit Counseling is another popular option to managing debt.  By taking the credit counseling agency approach they offer various ways to help you including financial management, setting up a budget and debt management plan.  The debt management plan involves the negotiation with the creditors on your behalf to try and gain more favorable terms.  The debtor will then make the monthly plans to the credit counseling agency and they will make the payments to the creditors on behalf of the debtor.

This can typically get you out of debt faster but there can be negative consequences on your credit report.  There will be a notation on your credit report that you are in credit counseling and this will negatively impact your ability to open new lines of credit.  Before taking this route make sure that you know you are dealing with a reputable credit counseling agency and understand your responsibilities as part of the debt management plan.

An  overabundance of debt can wreak havoc on our finances and our credit scores but if you manage debt you can stop it before you spiral out of control, which brings me to another point.  Once you are done with your debt repayment, consider starting up an emergency fund.

Manage Debt Before It Manages You!

Photo by: eric731
About Christopher


  1. I know it’s hard to get people to talk about this topic, but if you can find a great referral for a credit counselor, so much the better. As you know, there’s a ton of scammers in that business so doing your homework is paramount to avoid people preying on you when you’re most weak.

  2. Credit counseling is great, but there are too many scammers – just like AverageJoe said, who want to up sell you and get you into different programs.

  3. I agree with Eddie – be careful because there are a lot of scammers. Focus on paying it down and building up your emergency fund is a solid choice.

  4. I had thought about using an outside service, but then I realized that since I got myself into the debt, that I needed to get myself out. It gave me a sense of purpose when I was working on my debt reduction plan. After I paid off my last credit card, I had never felt better. I didn’t use anyone else but me to deal with the problem.

  5. We used to have to charge gasoline throughout the month for hubby to get to and from work as a US Army private on the base. It didn’t take us long to figure out that any income had already been spent on gasoline the prior month and to start finding every way we could to get out of that cycle!

  6. Totally agree with Grayson – I think it’s better to take responsibility and take action!

  7. I turn to some part-time jobs online to earn some extra and to supplement payment of debt. Beyond counseling or other budget formulation strategies, I guess the ultimate plan must necessarily include additional resource.

    • @ Amy – I turned to online to make some additional money…ie this blog. I agree with you sometimes you just do not have sufficient cash flow to make a dent in the debt.

  8. Great way to put it, manage debt before it manages you. And that’s exactly what it will do, as the person in debt becomes a servant of the debt itself. Whatever it takes, I think it’s important to be careful with who we get advice from, and then really buckle down and take personal responsibility for getting out of it.

  9. Quite Informative.You gotta be proactive for situation.

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