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Helpful debt management tips

Debt must be one of the biggest monsters in the world, and many people can do with some helpful debt management tips. It causes pain and suffering to a lot of people who don’t manage to tame the beast. Often people fall into debt because, when you keep borrowing, you don’t realize the hardships you may have to incur in paying it. Banks are often very kind when giving you a loan, often making it sound as if you don’t have to pay interest, when, more often than not, your interest charges exceed the value of the loan that you have taken out. Credit cards are another silent accumulator of debts. Its really easy to just go to a shop, not worry about the fact that you don’t have enough money in your purse to pay for what you buy because there’s that superhero called ‘Mr. Credit Card’ who’ll pay for your bill, how much ever big it is, and only asks you for the payment at the end of the month. However, when the credit card bill comes, you realize that you have spent way more than what you’ve earned for the month, and defer the payable to the next month, and so on, until the credit card company threatens legal action.

You’re not alone. There are a whole lot of debt management tools out there which are specifically designed to help you out with paying back all those debts that you’ve accumulated. Here are some of them:

1. Budget Calculator
The budget calculator allows you to keep a track of the income you earn and the expenses you incur, and the amount which is left over so that you have an idea of how much money you have at the end of the month to pay off your debts.

2. Accelerated Debt Payoff Calculator
The basic function of this debt management tool is to help you to identify how fast you can pay off your debts and become debt – free by considering your income, expenses and the debt that you need to pay back. By classifying expenses as either ‘needs’ or ‘wants’, the calculator will show you how much quicker you can pay off your debt by sacrificing some expenses.

3. Debt – to – Income Calculator
This calculator takes into account all the debt that you have owing, and your income, and checks the percentage of your income which is consumed by debt. If it’s 35% or less, it’s fairly OK, something which most people can manage. If it’s between 36% and 49%, you better start looking into it, and if its over 50% it’s the red light, which means that you’re in serious trouble unless you do something about it!

4. Mortgage and Loan Calculator
This calculator is used to analyze mortgages and loans in greater detail. You can enter parameters like loan amount, principal, interest rate, compound interest, payment cycle and term.

You have the discretion to choose one or more of the above Debt management tools according to your needs.

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