Are you controlling your finances or are they controlling your life? If you’re struggling to get out of debt, you may need some debt assistance.
In today’s borrowing society, it’s easy for finances to get out of control. Credit card debt can quickly mount as can overdrafts and store cards. Financial debt from loans like student loans, car loans and home loans becomes a way of life. Juggling all the costs of debt can feel like an increasingly challenging task.
If you feel that your finances are getting worse instead of better, it could be time to call for help. There are a few smart strategies to try that will provide some debt relief. If you’re ready to start tackling your debt, try these simple tips.
Understand your debt position
If your debt is spread across multiple types of borrowing, you’re probably dealing with different repayment requirements and varying interest rates. You may not really know how much you have borrowed or how much you are repaying.
Start by totalling up all the debt you have—adding it up will help you explore options for paying it off at a later stage. Now review all your repayments and interest rates so you can see exactly how much your borrowing costs.
Once you understand the structure of your debt, it may also help to review how much you are repaying every month and how much of that are interest charges.
Reduce the cost of your debt
Credit card debts, store cards and payday loans can have very high rates of interest. That’s because they are primarily designed as a tool to help you spend money, not borrow it. You may now find that it’s costing you a lot, and high interest rates are getting in the way of repaying your debt.
If you have varying debts in high interest accounts, you might save money by consolidating your debt into one place. Using a personal loan for debt consolidation has two main benefits. (1) You can put all your debt into one place and manage it with a single repayment and the lowest interest rate you can negotiate. And (2) you can move from juggling your debt to paying it off.
Start paying your debt off
If you want to get out of debt, look for a solution that will help you move from accumulating debt, to paying it off. A debt consolidation loan, for example, will give you the ability to manage structured repayments until your debt is fully paid off.
Building a robust budget that realistically outlines your monthly expenses is another key factor. Good budgeting will enable you to accurately predict how much money you have to spend once you have covered all your expenses. It will also ensure that you can afford the repayments on the loan you take out for debt consolidation. If you need help building a budget you can call on free advice from the New Zealand Federation of Family Budgeting Services. Click here to visit their website.
Begin a savings plan
Once you’ve got your debt covered, it’s time to start saving. Saving is sometimes as much about creating a habit as it is about how much money you set aside.
In today’s society, many of us spend today and pay back tomorrow. However, if you want to get debt relief, it’s a good idea to go the other way around—try to save today and spend tomorrow instead.
Being in debt and out of control can be stressful and hard to cope with. Being aware of how much you owe is a good starting point to finding debt solutions. And by taking control, you can finally start to create the financial future you are looking for.