Get debt under control

Money Smart
(ASIC)

 

Owing money or falling behind on repayments can be stressful. The good news is there are steps you can take to relieve the financial pressure.

1. Know what you owe

The first step is to get a clear picture of what you owe.

Make a list of all your debts, showing:

  • how much each debt is
  • the minimum monthly repayment (if any)

Include credit cards, loan repayments, unpaid bills, fines and any other money you owe.

Then add up all the debts to see how much you owe in total. It may be confronting, but remind yourself that you’re taking charge of your money. And that’s a good thing.

2. Work out what you can afford to pay

The next step is to work out how much you can afford to pay towards your debts.

Compare money in and money out

The easiest way to do this is to do a budget.

List all the money you have coming in each month (income), such as salary or benefits. Then list all the money going out (debts and expenses), for things like food, rent or mortgage, credit cards, electricity, phone and transport.

Tally these up, then compare money in and money out.

Maximise your entitlements and find savings

If your income has dropped because of the coronavirus, check if you’re eligible for extra Government financial assistance.

If you have more money going out than coming in — it’s time to make some choices. Think about what are:

  • ‘needs’ (can’t do without)
  • ‘wants’ (could do without, at least for a while)

Identify some expenses that you can cut or reduce. Be realistic — don’t make it impossible to stick to. See living on a reduced income for ways to reduce your spending.

3. Prioritise your debts

Work out which debts are your priority debts and try to pay them first if you can. Priority debts include:

  • rent or mortgage payments
  • council rates and body corporate fees
  • electricity, gas and water
  • car repayments — if you need your car for work or essential travel

If you can’t keep on top of these you can request financial hardship. You could also request financial hardship for lower priority debts like:

  • internet and phone bills
  • credit cards
  • payday loans or consumer leases

The National Debt Helpline has a step-by-step guide and can help you to prioritise your debts.

4. Build a savings buffer

Use any surplus you have each week to build an emergency fund. This will provide a financial safety net to cover any unexpected expenses or future changes to your income.

5. Get help if you need it

If you’re in crisis and struggling to buy food and pay for essentials, see urgent help with money

If you would like to know more, feel that you or anyone you know requires advice, or would simply like a review of your financial situation, please visit our contact page call our office today to arrange an appointment on (07) 5574 0667.

We encourage all of our clients and colleagues to Like and Follow us on Facebook as we will be posting exclusive content including business updates throughout 2020.

 

 

 

Note: This communication (including taxation) is general advice only and does not consider your personal circumstances. You should consider whether the information is appropriate to your individual needs, and not act on any information without obtaining professional financial advice specific to your circumstances. This communication including any attachments is intended solely for the use of the individual to whom it is addressed. Any unauthorised use, dissemination, forwarding, printing, or copying of this communication including any attachments is prohibited. It is your responsibility to scan this communication including any file attachment for viruses and other defects. To the extent permitted by law, we will not be liable for any loss or damage arising in any way from this communication including file attachments.

Disclaimer

The information has been given in good faith and has been prepared based on information that is believed to be accurate and reliable at the time of publication. The information is general in nature and does not take into account your particular financial needs, circumstances and objectives.

 

0

Like This