What Are the Best Tips for Debt Self-Help?

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  • Written By: Osmand Vitez
  • Edited By: PJP Schroeder
  • Last Modified Date: 06 September 2019
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Personal finances represent the income, expenses, and debt for an individual or family. Other items may also fall into this group depending on the individual’s or family’s current job or lifestyle. Debt self-help may be necessary when an individual or family discovers that current debt greatly exceeds income or other financial difficulties have risen. The best tips for debt self-help are to develop a personal budget, create a small emergency fund, organize debt, and start a debt payoff schedule. Repaying debt often takes great sacrifice if an individual or family desires to be free from this burden.

A personal budget is necessary for an individual or family to know the current state of financial affairs. The budget should include the average income from all areas that occur monthly. One-time cash receipts should not have inclusion in the budget. All monthly expenses should be included, such as housing, utilities, food, transportation, and similar items. The difference between the two is the amount left to pay debt, assuming the figure is positive.


An emergency fund of $1,000 US Dollars (USD) is often enough to ward off minor, unexpected expenses. While paying current expenses and debt, any extra money should go into this fund as the start of a debt self-help program. The purpose of the emergency fund is to develop a mind-set of paying cash when an unexpected expense arises. This fund helps an individual or family avoid the use of credit or other debt for such items. Common emergencies paid from this fund include doctor visits, car repairs, or other unexpected bills.

Once these pieces of information are at hand, an individual or family can then begin the assessment phase of the debt self-help process. This requires organizing all debt one of two ways: by smallest to largest owed or largest to smallest interest rate. These two methods are most common in standard debt self-help courses. Based on the gathered information, an individual or family can have a better understanding of how much debt they must pay off. A payoff schedule is the next step in this process.

Paying off debt from the smallest to largest outstanding balance creates a behavior of debt reduction. Debtors can spend all available cash against the smallest bill while paying the minimum balance on the others. Once paid off, all available cash goes against the next debt, and so on. Paying off the debt with the highest interest rate allows an individual or family to remove the debt costing the most from the schedule. Debt self-help courses recommend either method, depending on the individual’s current debt level.


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