From student loans and mortgages to vehicle financing and revolving credit, debt has become a cornerstone of modern life. Although it would be nice to pay for college out of pocket and own all your property outright, doing so is not feasible for most individuals. With the right financial strategies, though, debt will not weigh you down like an anchor. Below, an accountant from Cloyd & Associates PSC explains how to manage what you owe.

How to Handle Debt

1. Track Each Amount

Take an inventory of everything you owe, and use this list to devise a reasonable budget. If you know how to use digital spreadsheets, make a document you can update monthly to review financial progress. Otherwise, track the totals in a notebook and refer to them when payday rolls around.

2. Prioritize Minimum Payments

Ideally, you should pay more than the minimum monthly payment to eliminate debt faster. When money is tight, though, focus on meeting the minimum payments on all debts before overpaying on one in particular. This will help you avoid missed payments, which come with considerable late fees and can hurt your credit.

3. Contribute to an Emergency Fund

Life is unpredictable, and at some point, you will have to splurge on car repairs, a new water heater, or another unanticipated expense. Avoid taking on additional debt when these expenses arise by contributing to an emergency fund. If you have little disposable income, start by putting aside a small amount every week, and increase the contribution when possible. Even if you can only afford to save $20 per week, that will amount to more than $1,000 after one year, which is an excellent start to an emergency fund.

If you need help managing debt or determining your net worth, turn to an accountant at Cloyd & Associates PSC in London, KY. The knowledgeable team at this firm is proud to offer comprehensive financial services for both individuals and businesses. Whether you need professional guidance on tax planning or bookkeeping, you can rely on them. Visit their website or call (606) 864-8110 to discuss your financial goals with an accountant today.