A type of debt, and schedule of payments,

Acritical component of personal finance is avoiding debt build up. The subjectof debtmanagement is a growing concern of many in Malaysia.One of the major reasons why financial liabilities are growing in alarmingproportions is the unrestrained use of credit cardsIfyou are a responsible borrower, debt repayment is of paramount importance. Thematter should be treated with urgency. There has to be a conscious effort to reduceyour monthly debt commitment until all debt is settled. Take immediate actionThinking about reducing your mountain of debt ismentally draining. You can’t put the blame on anyone except yourself.

You couldhave escaped the piling up of debt if only you had the discipline to takecontrol. But that is in hindsight.Nonetheless, your debt won’t simply go away.

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Otherseven engage the services of professional counselors or the so-called’debt-relief’ experts. That might entail added costs which is something you’dlike to avoid.The best way to contain the situation is to fix yourfinancial dilemma on your own. With some smart planning and determinedapproach, your financial burden can be lessened and your monthly debtcommitment reduced.

5 ways to reduce your monthlydebt commitmentThe hardest part ofany debt reduction goal is knowing where to start. The timing is no longer aquestion because prompt attention is needed. If you’re firm on resolving thematter, follow these ways that can help you bring down your outstandingbalances to manageable levels.1.    Assessyour financial obligationsA good starting point is to ‘accurately’ evaluate yourcurrent debt situation. When you know the exact amount, type of debt, andschedule of payments, it would help you plan out better.What appears insurmountable at first would be doableif you’re organized and systematic in dealing with your circumstance.

You canseek the best alternatives to reduce your monthly debt commitments.2.    Alignyour budget with your debt commitment After you have assessed your financial obligations, reviewyour monthly budget. Do some financial exercise and list down ‘all’ yourregular and recurring expenses. Do not leave out any expense that would have amaterial effect on your monthly budget.Once you have deducted all of the expenses, the leftover cash will be the amount you can affordto pay your monthly debt commitments. You can increase your disposable incomeby revisiting your expense list. Look for the non-essentials like cable or i-netsubscriptions and other stuff.

Reduce your monthly spending on these items. Itwill put you in a better financial position as you begin a crucial activity.3.    Crafta debt reduction planWhen everything is arranged, you can craft a workabledebt reduction plan. Earmark your available monthly cash on hand for thosedebts that hurt the most.

It means you prioritize paying the loan with thehighest interest rate and highest outstanding balance.The plan will be a continuing cycle every month. Yourobjective is to significantly reduce the debt balance, if not fully liquidatethem. Repeat the process of ranking the debts according to the highest rate andoutstanding balance. As you’re implementing the debt reduction plan, you’realso tempering your spending.

In particular, you need to put a stop on yourcredit card usage. Accumulating more charges will only set you back and wreckyour debt reduction strategy.4.    Negotiatewith your creditorsAnother approach is to negotiate with your creditors.

Instead of turning your back and evading their collection follow-ups, face upto them. Negotiating with the banks or credit card companies is not a sign ofsurrender. Informing them of your predicament reflects your willingness to pay.There’s more to gain in case your creditors agree to areduced settlement or debt restructuring scheme. A payment extension might begranted too. Also, if there’s a window to move your credit card debt to a newone with lower interest rates, do it. Consider obtaining a personal loan to pay off debtsand consolidate them in one basket.

Some who took this option were able to reducetheir monthly debt commitments. Debt consolidation offers a lot of benefits too. Do not take this route if it will notlighten your financial cargo. 5.    Executeyour debt plan diligentlyThe success of your debt reduction plan rides on yourshoulders. Just as your accumulation of debt is your own doing, resolving theproblem is your own lookout. As such, executing your plan consistently, withoutfail, is a surefire way to achieve your financial goal.

Start implementing your debt plan theminute you are ready. No time should be wasted. The sooner you get the jobdone, the better.Be your own debt handlerA debt problem is a very private matter. If youdo want to disclose your financial concern, keep it a secret and deal with itby yourself. You can pull it off if you can strictly implement yourpersonally-crafted debt reduction plan.

Your financial mistake can only becorrected with willpower. Once you’ve succeeded, learn from your debt blunders.A debt-free situation is far better than a debt-ridden condition. 

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