In a perfect world, we would go through our entire life completely debt-free, but unfortunately it doesn’t work this way for most of us. The majority of people need a mortgage to pay for their homes and finance for their car repayments, and when emergencies arise (or even if they don’t!) the credit cards are always there to sort things out quickly.
Having debt isn’t bad in itself – it is almost essential to have at least some debt these days, as many contracts for services and utilities require you to have a credit history. The type of debt and amount of debt that you have, however, can have a huge impact on your life. There is a big expectation in society to live luxuriously, which often leads people to living beyond their means; this is one of the main factors driving people deep into credit card debt. Unmanageable debt can affect anyone – regardless of how much or little you think you owe, that feeling of depression and helplessness remains the same.
So to help Australians get on the path to living debt free, Debt Free Australia share some of their useful tips.
1. Take Immediate Action
If you are feeling overwhelmed by your rapidly increasing debt problem, now is the time to seek help. Sleepless nights are not uncommon when you are thinking about how long it will take you to completely pay off your debts, and waiting is only going to make things worse. At Debt Free Australia we are committed to helping people overcome their personal debt problems for good.
A common trend in making monthly debt repayments is to only pay the minimum required amount, which seems quite manageable. If you are only making the minimum payments, though, your debt level is going to keep increasing – by the time you realise you have a debt problem it is often too hard to manage. At Debt Free Australia we recommend drawing up a budget and working out the maximum amount you can afford to put toward your debts. Once you have that amount – stick to it.
Even a small amount over and above your minimum required payments will help to motivate you and make you feel better about your capacity to repay your debts.
2. Find Out Where You Are Sabotaging Your Finances
If you want to repay your debt as quickly as possible, you need to seriously examine what you are spending your funds on. It is important to put as much money towards your debt as possible, but you want to do this without creating a feeling of extreme sacrifice, which will only make it harder to stick to your budget. If you examine your budget and find that you are spending too much on something that could be a lot cheaper, make the necessary changes. Allow a minimal amount for eating out occasionally, or a haircut or clothes shopping. Your budget needs to be comprehensive and realistic, otherwise you run the risk of blowing it out.
The most important step is to start actively trying to rid yourself of debt. Waiting to see what will happen, or simply hoping that things will improve, is only going to lead to more trouble. If you are struggling with debt repayments, you need to seek financial advice. Call us at Debt Free Australia today on 1800 462 767 to get on track and start ridding yourself of personal debt.