Debt is a common tool employed by entities (individuals and companies) on their journey to financial freedom. As debt comes with financial restraints, it is important we monitor our debt appetite and usage. Quite often, we get so overwhelmed with bills that it becomes hard to keep up with our finances and we end up taking emergency debts without taking the to consider the impact on their financial position. Debt management is the process of controlling your debt through financial planning and budgeting. It involves the formulation of strategies to minimize and possibly, eliminate debt in the long run. With debt management, one should be able to pay off debts in such a way that maintains one’s financial stability. 


Budget Calculator: With a budget calculator, you can monitor your monthly income and expenditure, view how much money is left at each point in time and how much has been spent. It shows the total amount of money left after all expenditure including debt servicing has been satisfied. The budget calculator shows areas of improvement by comparing the results with a budget breakdown. The user will be able to view the percentage of their income being spent servicing debts and whether there is a need to review the ongoing debts. Some budget calculators use the 50/30/20 rule to account for expenditure i.e. 50% for necessities (utilities, housing, food, transportation), 30% for wants (subscriptions, entertainment) and 20% for savings and debt repayment. Some calculators use the 70/20/10 rule or 60/30/10.

A budget template was compiled by Fayosola Oke of the Life Diary Podcast with Debs & Fayo to help you become more deliberate with your finances. It will capture your spending patterns and help you cut your excesses to become a better money manager. Get 10% off when you use our discount code ‘BSFR10’ at checkout when purchasing the budget template. Shop the budget template at

Repayment Calculator: A repayment calculator aims to accelerate debt repayment. With the repayment calculator, you compare your monthly income or savings with the loan repayment balance to see the maximum amount that can be repaid per period to maintain financial stability yet pay off the loan at the fastest rate possible. This method helps to save a lot of interest that would have accompanied a longer loan term and saves you from debt responsibility faster. It shows you how long it will take to pay off a particular amount of debt with a particular income level at the given interest rate. It is great for also comparing interest rates when deciding what type of loan to get, what type of organization to obtain the loan from and the term of repayment. Microsoft Excel has a Loan Calculator template that can be used to test loan repayment plans and compare loan offers.

Financial Management Applications: Most of us use smartphones in these modern times and there are many applications developed to help our daily lives, finance management inclusive. These applications allow you to view all your financial accounts, analyze income and expenditure, categorize transactions and bills, create budgets, adjust expenses, send reminders when approaching budget limits, set financial goals and several other activities. Some also provide credit score reports.

Financial/Credit Counselling: There are credit counsellors that work with organizations to offer credit counselling services. They help review debts, analyze financial situations, credit reports and budgets for financial planning and make recommendations to improve one’s financial situation. They also help to design a debt management plan, offer bankruptcy counselling, student loan, personal loan, and housing loan counselling. In addition, they negotiate on behalf of the borrower with their creditors to reduce loan rates or waive late fees. There are for-profit and nonprofit credit counselling organizations. 

There is a debt management office in Nigeria charged with the management of loans obtained by Nigeria, domestic and foreign, as well as issue and manage FGN securities issued publicly. For instance, they manage China’s loan to Nigeria which as of March 2020 amounted to USD3.121 billion (N1,126.68 billion at 361/$) (D.M.O.N; 2021).

Debt Management Plans: This involves engaging the services of a credit counselling agency. The plan includes contacting creditors to get them to reduce interest rates, lower monthly payments or waive late fees. Under this plan, you only need to make one monthly payment to the credit counselling agency rather than directly to all your creditors while the credit counselling agency repays the creditors based on the agreed payment schedule. There is usually an agreement to not take up any additional credit during this time.

Advantages of debt management planning include an easier and more convenient way of repaying your loan, secure lower interest rates, simplify payments, pay off debt faster and improve credit score. Disadvantages include constituency i.e. to continue enjoying the benefits, consistent payments must be made, not all creditors participate and or will agree to lower interest rates, inability to obtain new credit and credit counselling fees.

There are several other debt management means that can be considered such as debt consolidation, debt settlement and filing for bankruptcy. Always ensure you are using at least one of them to ensure you are using debts optimally in your journey to financial freedom.

Please drop your questions, comments and other suggestions in the comment box, share this article and engage with us via our social media platforms @ broadstreetfinancialreview on Facebook, Instagram and LinkedIn.

Thank you for reading and look out for our next article!


A.C.C.C.I. (n.d.-a). Working with US Debt Settlement Service. Consumer Credit. Retrieved June 25, 2021, from,in%20a%20savings%20account%20for%20the%20time%20being.

Better Business Bureau. (n.d.). Pros and Cons of Using a Debt Management Plan. Retrieved June 25, 2021, from

D.M.O.N. (n.d.). FACTS ABOUT CHINESE LOANS TO NIGERIA – Debt Management Office Nigeria. Dmo.Gov.Ng. Retrieved June 25, 2021, from

Heath, R. (2020, September 1). What Is Debt Management? Bankrate.

Jespersen, C. (2021, March 25). Budget Calculator. NerdWallet.

Kagan, J. (2021, March 29). Credit Counseling. Investopedia.

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