Changing your habits if you’re a regular borrower can be hard, but there are methods you can use to help slash your debt.
Millions of Australians with substantial debt hangovers have been scrambling to start the year with better financial habits and pay off their debt. But changing habits is hard.
“But it’s not about slashing your weekly budget to a level that makes you miserable, you need to be realistic to make it work.” Here are some strategies that can help you pay down your debts.The first step is to face facts and make a list of all the debts you owe, according to the government’s Moneysmart website. Make sure the list includes buy now pay later loans, credit cards, loan repayments, unpaid bills, fines and any other monies owed.
While continuing to meet your financial commitments and making minimum payments on your other debts, your spare cash is used to pay off the debt with the highest interest rate and the harshest rate terms. While some cards offer generous interest-free periods, they can be accompanied by higher annual fees and a transfer fee that can be up to three per cent of the transferred balance.
Moneysmart warns against consolidating your debt with companies that make unrealistic promises, such as helping you get out of debt regardless of what you owe. Make sure you only deal with a licensed credit repair or debt management company.
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