I’m sure you’ll agree that in order to experience great things, you need to set yourself ambitious goals in life and work exceedingly hard at reaching them: Neither a great job, nor a sustainable career and a beautiful home come for free, after all. Many of these aims are obviously related to income and to most career-minded people, raising their earnings has accordingly become a top priority. And yet, all too often, they tend to forget that managing one’s salary is only one side of the coin. As income rises, so, mostly, do one’s debts – either to pay for beautiful things or as a result of career investments. And unfortunately, debts habitually tend to gain the upper hand.
Ambitious debt management
The point is that managing your debts can and should be an ambition for you as well. It may not make for quite as exciting cocktail party conversations as trying to earn your first million. And it will almost certainly not be quite as much fun to achieve. But try to think of it this way: Through sensible debt management, you will not only be able to avoid serious consequences should things go wrong – millionaires can go bankrupt, too – but it also raises the real value of your assets: A million on the bank is only really worth a million if you don’t have to pay off five hundred thousand in debts to your creditors.
Setting up a debt management plan
The question, of course, is how to go about debt management. Just as with your income, you should begin by setting yourself some realistic goals and then devise a plan on how to reach them:
• Create an overview of your total current debts and compare them your fixed assets and liquidity. This will show you not only how much you’re owing, but also how quickly you’re able to pay back your debts.
• Crunch some numbers on a worse-case-scenario: What would happen if you lost your job today? Would you still be able to pay back your debt? If not, what can you do about it?
• Define a debt limit. A small amount of debt is not only reasonable, but may actually be advantageous in some cases. The point of a debt management plan is not to avoid debt altogether, but simply to keep it at bay.
• Compare your debt limit with your current debt status. The difference between these two numbers constitutes a deficit, which a sensible debt management plan should set out to eliminate.
• Set yourself a period of time within which to reduce the difference between your ideal situation and the status quo and think of possible measures on how to achieve this.
• After you’ve attained your debt management goal, keep your debt at this desired level.
Contact a debt management agency
Contacting a debt management agency should be a top priority for you as part of setting up your debt management program. Through their experience, they will be able to properly assess your financial status and provide you with a wealth of useful information on how to go about putting things into practise. Make sure to work with a professional – just like you wouldn’t just trust anyone with your income, you wouldn’t want just anyone to tinker with your debts, either.
writing an essay