An important annual exercise in managing your finances is to review your debt situation. You need to know what your debts are to be able to have a plan for its repayment.
The new refrigerator, credit card spending on the family holiday, the personal loan all add up and suddenly much of your income is going towards repaying loans, leaving very little for saving and investing for your future. Knowing what your existing obligations are and seeing its effect on your finances can act as a brake on taking additional debt.
While an annual review can trigger a course correction, it can also act as a motivator to continue responsible behaviour where the review shows that you were prudent in taking and repaying debt. Read on how to make an annual financial review here: bit.ly/2ji3Fbq.
List and assess your debt
List all your debt irrespective of size or who you owe. This will ensure that you don’t miss out on any obligations and your repayment plan considers all of your debt.
