1. Automate Payments

This simple measure is one of a number of ways to manage your debts. Sometimes the temptation is to spend all the money that you receive and to place utility payments, loans and credit card debt at the bottom of your list of priorities. It is important to remember that credit card debt is especially expensive with interest rates often between 15 & 25! Automating your payments through standing orders or direct debits is a great way to manage your debts more responsibly because by not physically handling the money you remove some of the temptation to spend rather than repay.

2. Balance Transfers

Many credit cards now offer incentives for transferring your credit card debt to them, but this must be used with caution. It is a superb way of giving yourself a break from significant credit card repayments for up to six months, but all debt must be repaid in the end.

You will usually pay 0% for the first 6 months on the balance that you transfer over but remember that any additional spending made will incur interest charges at the standard Annual Percentage Rate associated with that credit card provider. Before you transfer your credit card balance ensure that you are clear about the annual percentage rate that you will be charged once the interest free period is over. If it is greater than your current APR then you will end up paying more money back and have higher repayment amounts. Also check that there are no arrangement fees for transferring your balance. Some credit card companies will charge you a fixed amount for the privilege of getting their 0% balance transfer deal and this will be added to you total debt. Balance transfers are really helpful if you are experiencing a blip in your income, perhaps through temporary loss of employment or a period of ill health, but if you have doubts about your longer term ability to return to work they may not be the best solution. However balance transfers can be a good short term measure of managing your debts and staying in control of your finances.

3. Mortgage Holidays

Mortgage holidays are now routinely provided by mortgage lenders to help mortgage owners take a break from their debt circumstances due to a short term change in their personal finances. It is not advisable to activate this mortgage holiday clause unless you need a short term relief from the pressure of monthly debt repayments. And you are confident of making up the difference. Given that the average monthly mortgage repayment is in excess of £500, a mortgage holiday period really can make a difference. It is important to remember however that most mortgage lenders will only allow up to a 3 month holiday period on your mortgage account and that you will continue to be charged interest on your total mortgage debt during this period.

4. Debt Consolidation

Debt consolidation is simply the process of combining all your debts into one large amount and paying a reduced monthly repayment as a result. Debt consolidation companies can offer you a lower monthly repayment fee because of the combined size of your debt and the fact that they will make more money from you in interest payments than they would if you had 10 or 12 debts with lots of different finance companies.

Debt consolidation companies act like a broker between you and the finance company and help you to find the best solution for your individual needs. In return they will charge you an arrangement fee proportional to the size of your debt, and which is normally added to your total debt burden rather than you having to pay this up front. It is worth looking for non profit debt consolidation companies that will provide you with a free debt service so that you do not have to take on any further debt. Debt consolidation is especially good for dealing with credit card debt where interest rates are very high.

5. Blog Your Way Out Of Debt

Another way to manage your debts is to become more accountable for your spending habits.

There is an increasing trend towards creating your own online personal finance blog and earning money from the advertising you display throughout the site. This may sound complex but the reality is that it is not, especially with web hosting companies now providing free blogging software. You need limited technical knowledge to set up your own blog and I have written a free resource with more information called Make Money Blogging.

A number of individuals decided that if they wanted to manage their debt and work towards debt free living the best way was to be accountable online and blog in general about their personal finance journey, set goals and feedback about how they are progressing. Obviously you need to remember not to post any information like account details that could leave you susceptible to online fraud, but there are a number of inspirational blogs written by people who are sharing their personal finance journey.

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