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10 Debt Management Strategies

Managing debt can either involve dealing with debt that has already accrued or avoiding it in the first place. These 10 debt management strategies give you the tools you need for sound financial management, no matter what your current situation might be:

1. Track your Spending - You can't get a handle on your cash flow until you know where it's flowing. Spend a few weeks writing down every pound you spend, whether it is on groceries, utilities or a quick cup of tea. It may seem like a lot of work, but the knowledge of where you spend your cash is valuable information that will help you manage your finances more effectively.
2. Categorize and Set Limits - With a listing of your expenditures at hand,you can categorize your spending into a few key groupings. Some examples might include rent, utilities, groceries, entertainment and school expenses for your children. Make enough categories that you can control spending easily, but not so many that your budget is too complicated to track. Once your categories are determined, set spending limits for each based on your spending habits you ascertained in the first step.
3. Keep up withYour Finances - Budgets are only effective if they are used, so make a habit of catching up your income and expense recording two or three times a week. This will give you an idea if you are spending too much in one category for that month, allowing you to make necessary adjustments in other categories when necessary.
4. Begin a Savings Plan - Savings plans don't have to begin on a grand scale to be effective. Begin by committing to putting £5 ($7.50) in each month. It may not seem like your savings balance is growing that quickly, but if you don't touch the money for a few months, you will begin to see some progress. Savings are a key factor in avoiding debt because it gives you money for emergencies like car repairs or medical bills for which your budget doesn't allow.
5. Pay off Expensive Debt First - Your budget plan should also include a list of your outstanding debt and the amount of your monthly payments. Obligations will be paid off much quicker if you make more than the minimum payments each month. Put the extra onto the higher interest cards first. Once those are paid off, move your additional payments to the less expensive obligations until everything is paid in full.
6. Avoid Additional Debt - The worst thing you can do when paying off debt is to rack up more at the same time. Get rid of credit cards by cutting them up and cancelling the accounts. If you can't bear to part with all of your cards, give one to a trusted friend for safekeeping. If you find yourself in a dire financial condition, your friend can help you determine if it is worthy of credit card use.
7. Beware of Impulse Spending - Retailers bank on the fact that shoppers will buy items on impulse, and they gear much of their marketing strategies to this fact. Never buy a product on impulse; instead, wait 24 hours before making a purchase to give yourself time to determine a payment plan. This will protect you against numerous additional purchases that you didn't really need, but seemed too good to pass up at the time.
8. Become a Savvy Shopper - Savvy shoppers know the best time of year to buy winter clothing and sheets for the bed. They know where the best prices can be found and who offers the best sales. Savvy consumers comparison shop before making any purchase, and they research even more to ensure large purchases are a good value. Savvy shoppers get the most for their hard-earned pound.
9. Learn Energy Efficiency - Utility bills can seriously eat away at your budget, so learn how to save on essentials like heat and electricity. Simple habits like unplugging appliances when not in use and placing weather stripping around windows and doors can save a bundle on utility costs. It may only be a few pounds here and there, but the savings will add up on an annual basis.
10. Make Full Use of Help Available - We listed a number of assistance programs with single parents in mind. Take advantage of as many as you can – at least while you are in the throes of digging your way out of debt. Every little bit of assistance will make a big difference in how far you can stretch your pounds every month.

In addition to these 10 budget-saving strategies, there are some common mistakes that single mothers make. By avoiding these financial traps, you can keep yourself on the straight and narrow when it comes to your budget.

Article provided by: Iva.net

Information about IVA:

IVA stands for Individual Voluntary Arrangement. It is a legal and government approved method of resolving debt that avoids the consequences of bankruptcy. If you owe over £15,000 to three or more creditors and can't afford to meet the repayments then you may be eligible for an IVA.

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