Given that a high proportion of people in the country have debt, you can be forgiven for thinking that debt isn’t really that bad a thing these days. There has been a form of normalisation of debt in recent times, but this isn’t the way to look at debt. If you do have debt, you need to manage this debt properly and there are a number of steps you can take to help you manage debt effectively.

Obtain your credit score

This can be a great starting point when it comes to knowing your debt levels and what your situation is. Not only will this action provide you with your credit score, you will receive a report on where you are and this should include tips and guidance on how to improve your credit rating. This is information that can prove invaluable to taking positive strides with your finances.

There are a number of leading credit report providers but these options cost money. You will find that you can obtain free credit reports with a quick Google search providing you with a suitable way to obtain your credit score without actually spending any money.

Create a budget to determine your spending habits

Once you know what your credit score is, you should look into creating a budget. This will provide you with the chance to review your spending habits and you can look to see if there are any areas where you can lower your expenditure. It may be that you are overspending on some products or there may be more affordable options at your disposal. There is a great deal to be said for finding ways to lower your spending without negatively impacting on your quality of life.

Stop using credit cards but don’t cut them up just yet

One of the most important ways to manage debt is to ensure that you don’t add to your debt. This means that if you have credit cards, you should stop using them. You should look to make payments on them every single month but you are not in a position where you are able to continue spending your credit card.

Some people will advise you to cut up your credit card and if you have very little willpower, this may sound like a good idea. However, if you do manage to reduce your spending and a financial problem or issue comes up out of the blue, not having access to your credit card could cause you problems at a later date. If you cannot have your credit card lying around because the temptation is too much, look to give it to a friend or family member to look after for you.

If you have savings, use some to reduce your debt

This is an area that some people will not agree with but if you have savings, using them to clear off your debt and return yourself to a clean slate with respect to your finances will often be a sensible idea. When you are debt free, you will find it easier to place money into savings and you won’t have to worry about the cost of interest costing you a lot more money.

Do not apply for new finance

It should go without saying but in the vast majority of cases, when you are looking to manage deb t, you shouldn’t apply for new finance. This is because it can have a negative impact on your credit score and it can lead you to increasing your debt. There is a way in which applying for new finance can make sense though and this is if you apply for a guarantor loan in order to consolidate your debt.

Consolidating your debt is a sensible approach to lowering your interest payments while making moves towards being debt free.

Start by paying off the debt with the highest APR

When it comes to clearing off any debt that you have, it pays to focus on the debt with the highest level of APR. While you should look to make the minimum payment on all of your debts, focusing on the one which will cost you the highest level of interest is a smart move.

Managing your debt can be difficult but it is far from impossible. When it comes to improving your finances and being confident about your levels of debt, these tips will help you to move in the right direction.

Andrew Reilly is a freelance writer with a focus on news stories and consumer interest articles. He has been writing professionally for 9 years but has been writing for as long as he can care to remember. When Andrew isn’t sat behind a laptop or researching a story, he will be found watching a gig or a game of football.