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Debt is unsettling, and an unsustainable debt-to-income ratio should make a consumer feel a little wary. However, it’s possible for a consumer to have consistent debt without ever being overwhelmed by it. Here are four tips that will help you manage your debt and stay on top of your monthly payments:

1. Spend less than you make.- In order for you to avoid accumulating debt, your monthly income must be greater or equal to your monthly expenditures. If you really care about your financial freedom, then go a step further and only spend what you need to until your debt is more manageable.

 

2. Devote a savings account to emergency expenditures.- Open a savings account with a few hundred dollars in it, and try to add between five and ten percent of your income to that account every month. This will allow you to build up a cash cushion that you can use for emergencies and other unexpected expenses that may arise.

3. Make your monthly payments on time and in full.- As difficult as it may be to allocate a large portion of your income to paying your credit card bills and making loan payments, these payments are smaller now than they will be if you put them off until later. Many lenders increase interest rates and charge late fees when payments are not made on time.

4. Meet with a bankruptcy attorney if you are having trouble doing all of the above.- If you are having trouble spending less than you earn and you find it difficult to make your loan payments on time, then consider meeting with a bankruptcy attorney to discuss your options for financial restructuring. Remember that filing bankruptcy is common and often is the best way to restructure your finances in a way that makes them manageable for you.

Our highly qualified bankruptcy attorneys have been helping families in the Chicago suburbs declare bankruptcy and start fresh financially since 1990!