Managing Debt: Simple Strategies for Treasury Leaders

Debt shows up in many forms – a student loan, a credit‑card balance, a business line of credit. If you don’t keep an eye on it, interest can eat your cash flow fast. Below you’ll find a straightforward plan that works for both personal finances and a corporate treasury. No jargon, just steps you can start using today.

Step‑by‑Step Debt Management Process

1. List every debt. Write down the amount, interest rate, minimum payment and due date for each loan or credit line. Seeing everything in one place makes it easier to compare.

2. Rank by cost. High‑interest balances (usually credit‑cards or payday loans) should be at the top. Paying them down first saves the most money over time.

3. Calculate the real cost. Use a simple loan calculator to work out how much you’ll pay over the life of each debt. That number often surprises people and motivates quicker payoff.

4. Pick a repayment method. The debt snowball (smallest balance first) builds confidence, while the debt avalanche (highest rate first) saves interest. Choose the one that fits your personality.

5. Consider consolidation. If you have several high‑rate loans, a single personal loan with a lower rate can reduce monthly outgo and simplify tracking. Just make sure the new loan’s total cost is lower than the sum of the old ones.

6. Boost your credit score. A better score opens up lower‑rate options. Pay all bills on time, keep credit utilisation under 30 %, and avoid opening new accounts unless necessary.

7. Set a realistic budget. Zero‑based budgeting works well – every pound has a purpose, from living costs to debt repayment. Adjust the budget each month based on what actually happened, not what you hoped.

Tools and Tips to Keep Debt Under Control

Use a spreadsheet or a free budgeting app to track income, expenses and debt payments. Automate the minimum payment for each debt, then schedule an extra transfer to the top‑ranked debt each month.

Watch out for hidden fees. Some lenders charge arrangement costs, early‑repayment penalties or monthly administration fees that can negate any interest savings.

If you’re a treasury professional managing corporate debt, the same principles apply. Review all financing arrangements, negotiate better terms, and consider refinancing when market rates drop.

Remember, managing debt isn’t a one‑off task. Review your list every quarter, adjust for any rate changes, and celebrate each milestone – whether it’s a £100 extra payment or the first loan fully cleared.

With a clear list, a solid repayment order, and the right tools, you’ll keep debt from becoming a surprise expense. Start today, stay consistent, and you’ll see cash flow improve faster than you expect.