Getting on top of your debt can sometimes be a daunting prospect, particularly if you feel it’s getting a little out of control. The table below provides some simple tips to help you take control of your debt.
|1. Acknowledge the problem and understand where you stand||
Set aside a small amount of time ideally every week to monitor and manage your finances.
Understand what debts you have and aim to consolidate your debt to make it easier to manage—you could also potentially save on fees and interest rates by doing so.
|2. Set-up a simple budget||
Use a tool like the AMP Budget Planner to help you understand your regular expenses like utilities, food and debt repayments, as well as variable expenses such as clothes and eating out.If your expenses are greater than your income, you’ll need to make adjustments.
|3. Stop spending||
You now have a plan for your money and it will be easier if you make a decision to stop spending where possible, below are some useful tips on how you might start.
|4. Actively manage your money||
Make this a habit.
Sticking to your budget, follow a set routine of putting money aside for your essential items like debt payments and monthly bills. Make sure you pay these on time to avoid late fees and extra interest charges.Then keep aside the amount you’ve set in your budget for other variable expenses - ideally in a separate account. When this is down to a $0 balance, don’t spend any more.
|5. Find larger cuts||
Are there ways you could make bigger savings?
|6. Grow your income||Make money on the side. For example, start freelancing, sell some stuff on eBay or get a part-time job.|
|7. Track your progress||Update your budget so you can see how your debt is shrinking.|
And don’t forget to celebrate regularly as you tick off another win.
Following these steps should help you get on top of your debt. But if you’re still struggling to pay the bills on time, you could:
- Try bill smoothing – many energy companies can break down your bills into regular even payments over the year so there are no nasty surprises.
- If you’re receiving Centrelink payments, there’s a free Centrepay service that automatically deducts money from your payments to pay your bills.
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It’s important to consider your particular circumstances and read the relevant Product Disclosure Statement or Terms and Conditions before deciding what’s right for you. This information hasn’t taken your circumstances into account.
This information is provided by AMP Life Limited. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you. All information on this website is subject to change without notice.