Are you having problems managing your loan repayments? Are you finding your bills more and more difficult to pay on time? Are you paying interest and penalty charges for late payments – and these are just adding to your overall debt?
If this is you, then chances are your debts may be getting beyond your ability to pay.
Here are 4 simple ways to get your finances back on track.
1. Make a budget
Make a list of all your expenses and match them against your income. If your income is not covering the bills – make changes wherever you can. Maybe you could catch public transport rather than driving and parking; maybe you could reduce your electricity bill by switching off lights and appliances you are not using; maybe you could eat out less often or make your own lunch rather than buying it from the café down the road. Once you make a budget you will be able to see where your biggest bills lie, relative to your income.
If you can’t reduce your expenses, it might be time to sell some of your assets to get you back on track. But weigh that decision against the expenses you will incur on the alternatives. For example, you may be better off to sell your home if you are struggling to make the monthly repayments, but weigh that up against the subsequent payments you will have to make for rent.
And lastly – stick to your budget – be disciplined!!
2. Talk to your mortgage provider
Changing the interest rate or terms on your home loan can help you temporarily reduce the monthly repayment amounts – and may even save you money. This may not be a long-term solution, but it will give you some breathing space to get ahead on other debts. If your provider can’t help – look around for other providers who might be able to offer a better deal and switch your home loan. Check the interest rate as well as any fees or charges that apply with a potential new provider to ensure that you will in fact be better off.
3. Consolidate your credit card debt
If you have a number of credit cards and you are paying only the minimum repayments each month chances are the overall cost to you is growing by the month. There are credit card providers who offer low interest rates as an introductory offer. Transferring all of your debt onto one low interest charging card will allow you time to get on top of the repayments and having one card will make it easier for you to keep track of your spending. But beware! This will only work if you can be disciplined about NOT racking up more debt on the new card. Oh, and you should close the accounts on all your old cards.
4. Take action
You want to avoid the stress and sleepness nights that debt gives you, right? Take action now!
If you have taken steps 1-3 and you are struggling to pay your bills, don’t be afraid to seek help. There are people who can help. The important thing is not to get yourself into more debt.
There are debt agencies like Debt Agreement Solutions that can provide advice and assistance to people struggling with debt. This is not a free service and there will be fees to pay. The point is they can assess your situation and provide you with options that will suit your circumstances, and they can manage the process for you. Call Debt Agreement Solutions on 1300 653 962.
If you find yourself unable to take steps 1 or 3, then you can talk to a financial counsellor. There are free services available in Australia through community organisations and also through government programs.
Don’t put it off – take action today.