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Debt is one of the most notorious four-letter words in personal finance, and it’s something almost everyone grapples with. It doesn’t matter if you have a little bit of debt or a lot; there’s no better time than now to tackle the problem. And here are a few tips.

Track and manage your spending

One of the best tips to get out of debt is to track and manage your spending habits. Continuing to live beyond your means will only increase the amount of debt you have. To manage your spending and to cut back on frivolous purchases, create a budget and track what you spend for a few months. With this information, you can figure out where you’re spending money excessively along with areas where you can cut spending.

With a budget, you can determine how much income you have coming in, how much money needs to go towards debt and bills, and then how much is left over to put into savings, your emergency fund, etc.

Understanding debt

Write down your debt

For many people, it’s hard to visualize their debt and how much they’ve actually accrued until they see everything put together. To get a good idea of how much debt you owe to creditors, take the time to write everything down.

[READ MORE: How to know when your debts have gone overboard]

Create a payment schedule

With a full list of your debt, you can create a payment schedule. This is a calendar that allows you to see when debt payments are due and how much you owe on a certain day. With a payment calendar, you can ensure that you’re always making payments on time and that you’re paying the proper amount.

Create multiple income streams

Let’s be honest, sometimes a single job doesn’t pay the bills as nicely as we’d like it to. The good news is that in today’s digital world, there are all sorts of ways to make money without having to pick up a second full-time or part-time job. Learn more about the world of side hustles to supplement your income. You can make money each week by creating web content, writing online reviews for products, or by selling items that you can make at home for a low cost. With a side hustle, you can increase your income without feeling overworked. The money made from your side hustle should go directly towards debt.

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Recognise the signs that you need help

Sometimes, tackling debt can feel impossible. If you’re struggling to make the minimum payments or to make payments on time, don’t feel ashamed or embarrassed asking for help. Taking action as soon as possible is the best option.

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Know who and how much you owe

Make a list of your debts, including the creditor, total amount of the debt, monthly payment, and due date. Having all the debts in front of you will allow you to see the bigger picture and stay aware of your complete debt picture.

Don’t just create your list and forget about it. Refer to your debt list periodically, especially as you pay bills. Update your list every few months as the amount of your debt changes.


Create a monthly bill payment calendar

Use a bill payment calendar to help you figure out which bills to pay with which paycheck. On your calendar, write each bill’s payment amount next to the due date. Then, fill in the date of each paycheck. If you get paid on the same days every month, like the 1st and 15th, you can use the same calendar from month to month. But, if your paychecks fall on different days of the month, it would help to create a new calendar for each month.

Make at least the minimum payment

If you can’t afford to pay anything more, at least make the minimum payment. Of course, the minimum payment doesn’t help you make real progress in paying off your debt. But, it keeps your debt from growing and keeps your account in good standing. When you miss payments, it gets harder to catch up and eventually your accounts could go into default.

Decide which debts to pay off first

Use your debt list to prioritize and rank your debts in the order you want to pay them off. You can also choose to pay off the debt with the lowest balance first.

Use a monthly budget to plan your expenses

Keeping a budget helps ensure you have enough money to cover your monthly expenses. Plan far enough in advance and you can take early action if it looks like you won’t have enough money for your bills this month or next. A budget also helps you plan to spend any extra money you have left after expenses are covered. You can use this extra money to pay off debt faster.


The crowding out effects of rising States' debt: Why Nigerians should worry

The 50/30/20 budget

The 50-20-30 (or 50-30-20) budget rule is an intuitive and simple plan to help people reach their financial goals.

The rule states that you should spend up to 50% of your after-tax income of needs and obligations that you must-have or must-do. The remaining half should be split up to 20% savings and debt repayment and 30% to everything else that you might want. That will wipe out debt faster and help you save on interest.

[READ ALSO: Understanding Debt: How individuals and businesses can use it responsibly]


Managing debt can be frustrating. There’s nothing worse than knowing that you got yourself into your financial situation but not knowing exactly how to get out of it. By using these financial rules, you can better manage your debt and work your way towards being debt-free.


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