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It’s all too easy to ignore debt until things reach a crisis point. But if you owe money to one or more creditors and you don’t have a clear idea of how you’re going to pay it off then burying your head in the sand is just a sure-fire way to find yourself in difficulties.

So, how can you manage debt carefully and responsibly in order to get it under control and keep it from becoming a much bigger issue? Here are some tips:

Make more than the minimum payment

If you owe money on credit or store cards then do not fall into the trap of making minimum payments each month. Paying off the minimum amount means the debt lasts much, much longer and that means you’ll pay hundreds or maybe even thousands extra in interest over the lifetime of the debt.

Paying even just a small amount on top of the minimum payment will save you a fortune in the long run and help you become free of debt sooner.

Know what you owe

You can’t manage your debts properly until you know how much you owe and how much you can afford to spend on clearing it. A surprising number of people with debts don’t actually know how much they owe, so sit down with a pen and work out exactly how much debt you have. Work out how much will it cost to meet your debt obligations each month.

Draw up a budget

Once you know how much your creditors are demanding each month, you can work out what you can afford. Draw up a budget showing you how much you have coming in and going out each month. Don’t forget to include essentials like mortgage or rent, commuting costs, gas and electricity bills, and food. There are some useful templates online, just search ‘household budget planner’. This should give you a clearer idea of how much money you have to clear your debt each month and allow you to set a realistic time frame for clearing your debts.

If the numbers show that you simply can’t afford your repayments at their current level then see the tip below – get some help.

Get some help

If you’re genuinely struggling to stay on top of your repayments and you’re starting to worry that your debt levels are out of control, stay calm. You can negotiate with your lenders, it’s in their interests to keep your repayments affordable rather than risk you paying nothing. If you want someone to help you negotiate or simply need some free debt advice from experienced advisers then get in touch with PayPlan. Our advice is free, there are no hidden fees or nasty surprises and we have plenty of experience in helping people just like you.

It’s not all bad…

One important thing to remember is that managing debt well can boost your credit rating. Even if you’ve been struggling with missed payments or overdue bills, taking charge of your debt and working towards clearing it will help your credit score recover. It shows that you can be responsible with debt and can manage it successfully, and this can mean you find it easier to qualify for a mortgage or other important financial product in the future.