Debt comes in different shapes and sizes. Some people have outstanding loans, others have credit card bills and financing issues. The debt itself is not a bad thing if you can manage it well because paying off debts on time helps you build a healthy credit score.

However, a study carried out by The Office for National Statistics – which is carried out every two years – found that the average household debt in the UK has risen 9% to just over £9,000. This is a trend that has been discovered in many other countries.

Rising debt combined with fewer people saving as much could easily spiral out of control. If this sounds familiar, you need to adopt the best three debt management strategies in 2020. So, what are they?

The Snowball Reduction Method

When most people take out loans, they do it by calculating how much they are able to repay comfortably. By paying a little bit more over time on each payment, you can snowball your repayments and pay off the total debt quicker. Thus, saving you money on loan interest that can otherwise build up.

This method sounds simple enough, but to do it in the best possible way, Wonga has provided this free debt management guide to the snowballing method!

Consolidation Your Debts

If you are someone drowning in credit card debt, one of the best ways to escape multiple repayment requests each month and save money is by consolidating those debts into a single debt through a balance transfer. By moving all debt onto one credit card – also possible with loans – managing the debt becomes easier, but it is also possible to reduce the amount you repay each month.

The only downside to this method is that repayments usually last longer. Nevertheless, those repayments become more manageable and give you time to breathe.

Start Tracking Your Finances!

Even people not in debt are reluctant to look at their bank account when they know they have been financially irresponsible, so it is no surprise that those in a lot of debt do not want to confront their bank balance.

Yet, if you start making a financial action plan to pay off each of your debts, you can relax knowing that the challenge you face is possible by doing certain things. Knowledge is power – and it is just as true when dealing with debt.

To plan your finances, start by calculating your expenses, make a budget and keep track of everything in a spreadsheet that you update weekly.

What Else Can You Do?

If you are struggling with where to turn and need more information on these three debt management strategies, you can also look for free debt help groups, some of the best are discussed by UK money expert Martin Lewis here.