If you're struggling to make ends meet and pay off your debt, you're not alone. Debt is a burden that plenty of Australians carry, with many working hard to clear it. While it can be difficult to overcome, it's important to recognise that there is hope.
Fortunately, there are some things that can pay off your debt faster and get you back on track financially. Here are seven important steps to take:
1) Cover the Minimum Repayments
One important thing to do to get out of debt is to make at least the minimum repayments on all of your accounts. This may seem like common sense, but it's something that far too many people fail to do. Not only will making your minimum repayments help you avoid late fees and penalties, but it will also help you avoid damaging your credit score.
2) Organise and Prioritise Debts
Create a comprehensive list of all of your debts and understand what to finish up first. This is because it will help you understand where you stand financially and what to do to get out of debt. Plus, it will help you figure out your debts and prioritise the most important ones first. Once you've done this, you can start to focus on paying off your debts one by one.
3) Plan Spending Around Repayments
One good way to get out of debt is to plan your spending around your repayments. This means you need to ensure you're not spending more than you're bringing in each month. For instance, create a budget. This will help you track your income and expenditure so you can see where your money is going each month.
4) Utilise Existing Savings for Debts
If you have any savings, you may want to consider using this to pay off your debts. This is because it can help you get out of debt sooner. Plus, it can give you some breathing room regarding your finances. Just make sure you have a plan in place for how you will replenish your savings once you've used them to pay off debts.
5) Find Other Streams of Income
If you're struggling to make ends meet each month, you may want to consider finding other sources of income. This could include getting a second job, renting out a room in your house, or selling items you no longer need. This extra income can help you get out of debt sooner and gives you some leeway regarding your budget.
6) Think About the Interest Rate
When you're trying to pay off debt, you want to ensure you're doing it in a way that saves you money. This means you should focus on paying off debts with the highest interest rates first. This will help you save money in the long run and get out of debt more quickly.
7) Find the Right Financial Plan for You
There are a lot of financial plans out there, and it can be quite hard to know which one is right for you. Because of that, you may want to consult with a financial advisor to help you create a plan that fits your needs. This plan can help you get out of debt and save money in the future.
It's important to take the right steps to pay off your debt and get your finances back on track. By following the seven tips above, you can clear your debt faster and start building a bright financial future.
Looking for financial planners on the Gold Coast? Swell Financial Planning can help with debt, investment, insurance, budgeting, cash flow, superannuation, and more. Get in touch with us today!