In many households, debt is the number one problem that couples are fighting about and everyone is losing sleep at night. When it comes to debt repayment, people seem to make the same mistakes over and over and therefore become lodged in the cycle of debt, finding it difficult to escape from.

Here are some dos and don’ts of debt repayment that you should adhere to when trying to repay the debts that have accumulated.

Do Calculate How Much You Owe

Calculate how much money is owed to each creditor along with the amount of money that is owed as well as the interest rate that is being charged to the account. This will allow you to calculate the cost of the debt each month by using the balance and interest rate to come to a figure that is accumulating each month.

There are many consumers who are unsure about how much it is that they owe. They are unable to get the exact number and therefore are shocked when it comes time to tally up all the debt. Are you one of these consumers who is unsure about your debt and just how much you owe? Getting it all on paper and organizing the numbers is the only way that a repayment plan can be created.

Do Stick to Your Budget

Now that you have calculated the amount that you are truly in debt, it is time to ensure that this debt is repaid. Creating a budget that allocates fifteen percent of the income towards debt repayment means that you can get out of debt quicker and more effectively.

Aside from getting out of debt, creating a budget allows the consumer to allocate money towards the savings account to establish an emergency fund and to ensure that all expenses are being covered each month.

Does your budget balance? This means that the expenses should be equal to or less than the income which is coming into the household each month. When trying to balance the budget it may be necessary to either increase the income or decrease the variable expenses to make the budget balance. These changes should be embraced as it can help the consumer to learn to live within their means.

Don’t Accumulate Useless Credit Card and Bank Fees

When you accumulate fees each month for non-sufficient funds in the bank account or late fees and Overlimit fees for the credit card it can lead to hundreds of dollars in wasted money per year as this money could be allocated towards saving and debt repayment.

Overlimit fees for a credit card can cost as much as $39.00 each billing period that the account is over the limit. Other fees that are associated with insufficient funds in the account can cost upwards of $40.00 for each payment that is processed through the account where the balance will not fund these purchases.

Don’t Use Credit for Any Purchases

Once you are facing credit card debt it can be difficult to see the light at the end of the tunnel. This debt tunnel can only be expedited when it comes to using more credit to fund purchases. Credit should be avoided once you are in debt as it can just lead to a more overwhelming financial situation.

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1. How to Budget Your Debt Repayment