How to Manage Your Debt

"I find that it helps to break down the big picture into smaller achievable tasks and to recognise and celebrate these achievements along the way."
-Katherine Hann
April 4, 2017

How to Manage Your Debt

By Katherine Hann

How to Manage Your Debt

 

Now that Christmas and the Holiday Season are finished, do you still have debt hanging around?

Perhaps you have small debts in a lot of places?

Here are a few tips on how to make this easier to manage and get yourself out of debt sooner:

 

1. Add up all of your debt (don’t include your home loan).

You can’t reduce this if you don’t know how much it is.

 

2. Set up a budget and make it realistic

You have to pay your home loan (or rent), your bills, and meals – make sure there is enough for this first.

 

3. Prioritise your spending and make sure paying debt is near the top of the list.  

Pay off the debt with the highest interest rate first. Yes, that means you need to find out what
interest rate(s) you are paying.

If you can’t find out from your statement, ring the company!

 

4. Close each account as soon as the debt is paid off. 

Don’t be tempted to keep a credit card open “just in case.”

 

5. Consider consolidating your debt. 

This may feel scary as it seems like you’ve now got bigger amount, but the interest rate may be a lot lower than you are paying on each individual debt.

 

Your financial planner is here to help with budgeting, saving, and debt management. Contact Katherine Hann on
(08) 8299 9927 for a no-obligation conversation or email katherinehann@internode.on.net.