When it comes to managing debt, there is always a financial wizard available to tell you that their way is the best way. The single mom knows that this just can’t be true or there would only be one ‘best way to successful debt management’. Each case is unique, and each family has to find a way to pay off debt that works best for them.
There is really only one good way to manage debt, and that is to eliminate it. How you go about doing that is where the problems start.
One of the methods that work for many families is to list the debts in order of total amount owed. Start at the bottom of the list, with the smallest total debt, and pay it off quickly by making only minimum payments on the other debts and putting every penny on the small debt. When this debt is paid in full, take the amount you were paying and add it to the amount you have been applying to the next lowest bill. As you continue to work your way up the list, concentrating on the lowest bill left on your list, you are still paying the same amount each month, but your overall debt is being reduced. Soon, you’ll be paying off your final large debts and the amount you’ll be putting on that is really making a difference.
One of the satisfying things about this debt payoff plan is that you are rewarded with a feeling of success with the elimination of that first small bill. This could offer you the incentive you need to stick with your plan.
Another method that works in some instances is to list the debts according to the amount of interest that is being charged by the company. Attack the debt with the highest interest rate first. This makes sense because the high interest is only making the amount of your total debt even larger. You may not start seeing the results for a while in the form of a “paid in full” statement, but you’ll know that you are steadily bring the amount of your total debt down.
Which ever method works best for your family can be helped along if you can discipline yourself to find ways of trimming even more money from your daily expenditures and throwing it at the bill you’re trying to pay off. If the energy bill goes down between the heating season and the time you need to start using the air conditioning, add the savings to the amount you are paying on the targeted bill. Every little bit helps, but the average single mom shouldn’t feel guilty if she already has plans for that little bit of money. It’s not often that there is a windfall that allows her to finally make those purchases she’s denied herself and the family for so long because money was tight.
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