From debt to “Mastering Money Management”

Subject page : Money Matters

Most people who struggle to manage their finances concentrate on how they can get more money in. Unfortunately more income usually brings more expenditure. Anyone looking to come out of debt should not focus on how to obtain more money, but rather how to bring their current finances into a stable position.

There are two categories of debt.

Controlled debt

Uncontrolled debt

Controlled debt is debt that is managed like a mortgage or student loan repayments. Debts where you have set in place a clear method of repayment and you are able to keep up with those repayments.

Uncontrolled debt is debt where you have taken finance and have no current method in place to regularly keep up with the payments. These debts carry high penalties which cause the debt to keep growing.

Both of these forms of debt cost you money although the controlled debt can be obtained for a fraction of the cost when compared to uncontrolled debt. People with finance problems usually find themselves spending a huge amount of money funding the uncontrolled debt. This is why it is imperative for anyone seeking to get out of debt to first focus on stabilising any uncontrolled debt. Uncontrolled debt left alone will simply increase due to the high interest rate that is applied to it causing the debtor to automatically get deeper and deeper into trouble. This is why you should never ignore any early signs of uncontrolled debt such as being unable to meet odd payments. No one likes dealing with issues that bring stress but not taking the time to work out a plan to stabilise your finances will not only bring stress but cause you to pay highly financially in the short and long term.

• The first and biggest step in stabilising your finances is to be willing to take responsibility for the debt and not blame people or circumstances around you.


• The second step is to stop making excuses to keep it. Fear of facing the size of the debt is a classic example.


• The third step is to be willing not to take on anymore financial commitments. If you swipe your credit card for every whimsy desire this will take a lot of discipline.


• The forth step is to be willing to temporarily let go of unnecessary commitments. Little cosy comforts can accumulate to large costs at the end of each month.

Trying to overcome debt without first addressing these issues will cause frustration and discouragement. Focus on bringing your debt into a place of stability. This will allow you to see the true size of the debt enabling you to put in place clear methods to decrease it.

Author:  ffig
Added:  43 Jun 2009