Budgeting

Manage your debt with some easy tips

In short, per-capita debt has rarely been this high. If the almost $2 trillion owed by Australians was divided equally among its population of 24 million, it equates to $79,000 for every man, woman and child.

But it’s not all alarming news. It is believed debt levels have risen not only because of house prices and the cost of living, but because of low unemployment, a strong economy and falling interest rates, meaning Australians are simply more confident about borrowing more money.

With borrowing, however, comes responsibility. Debt should never be taken lightly, ignored or dismissed – as doing so can land you in trouble.

So if, like most Australians, you have some debt and you want to set your mind to getting it under control, here are some practical tips:

1. Be honest

Don’t fall into the trap of dividing your debt into pieces rather than considering it as a whole, because that’s the same as burying your head in the sand. You may have a small mortgage, one or two credit card balances, a car loan and a small personal loan – but have you added it all up recently?

2. Be smart

When you do, it might be a good idea to reduce the limits on the credit cards for example, or set up auto debits that pay over and above the minimum repayment each month.

3. Consolidate

Adding up your total obligation might also be an ideal time to think about consolidating your debts, if possible, into a single loan. That way, you will stop fragmenting the debt in your mind, potentially save on interest, and better manage your obligations with a single monthly payment that is easy to budget for.

4. Switch credit cards

Similarly, make use of any opportunity to transfer any outstanding high-interest credit card debts on to a new card with one of the 0% interest rate introductory offers flying around. It could save you a lot.

5. Prioritise

If you find yourself struggling to deal with all your debts each month, make sure you get your priorities right. Secured debts like house and car loans should take priority, as should taxes that will upset authorities if not paid on time.

6. Don’t miss out

Don’t be so proud that you miss out on anything you might be entitled to that could really help your financial situation – like tax benefits and income support. It all helps.

With simple, honest management, debt doesn’t have to be a big deal. If you run into trouble and need an easy personal loan you can set up in minutes, Credit24 is always there to help.

For more financial tips, check these 8 easy ways to save money on a tight budget.