Debt Management Strategies
The concept of dealing with debt is a complex notion. There are so many layers therein that hold their own connotations. You have good debt, which can help you a great deal when it comes to your credit history. Then there’s bad debt; this comes from mismanaged spending and use of credit. The balancing act here requires some sound debt management strategies.
The beauty of dealing with debt, is that there’s more ways than one to skin this cat. As such, LeapFrog is here to help you navigate these murky financial waters. We’ve prepared a breakdown of two of the best debt management strategies to follow. These are great steps towards unlocking financial stability, and alleviating any corresponding strains.
The Avalanche Method
Let’s say you have a considerable amount of debt. This mountain of a burden can seem too overwhelming to approach at times. In some cases, it’s piled so high you may not even know where to begin. Luckily, there’s a great strategy to adopt that will help compartmentalize things to a manageable degree.
The avalanche method dictates that you round up all of your debts, and categorize them based on their respective interest rates. For those with a higher rate, make a conscientious effort to pay more than your monthly minimums. For those with lower rates, focus on just making the minimum payment. By prioritizing the former in this way, you’re able to make headway on the more demanding debts.
The Snowball Method
Next up, we have the snowball method. Unlike its counterpart, the focus here is less on interest rates, and more on your overall balance. Again, round up each of your outstanding debts. But this time, you’ll prioritize the accounts that have the lowest remaining balances. Do what you can to resolve these first.
Resolving an outstanding balance can have an incredible impact on your credit. You’ll want to exercise caution with this method, though. Only go this route if you have enough to do so, AND make the minimum monthly payments for all other accounts you have open. The last thing you want to do is jeopardize the good standing of your other debts. A payment that’s 30 days delinquent can wreck your credit, regardless of the account.
This brings us to the end of this week’s entry. We sincerely hope that the information provided will assist you in eliminating stress. Be sure to check out our extensive blog archive to learn more about properly managing your debts and finances. Have questions about our advertised services? For any other questions, reach out to us via our contact page today