The new year calls for a brand new you. How do you see yourself in 2013? Fit, cigarette free, travelling the world, or is it simply being able to afford to pay your bills on time.
Thousands of Aussies are living from payday to payday, struggling with bad debt and desperately searching for some help. Well now is the time to kick start you financial resolution.
Here is a New Year’s countdown which will get you well on the way to reducing your debt, boosting your savings and getting your finances back on track.
10. Organise a budget.
Many people we talk to have no idea what they owe to their creditors. To get on top of your finances, you need to know what you are tackling and the easiest way to figure that out is with a budget.
You need to know your income, from all sources including government benefits and investments, then write down a list of your regular expenses including loan and credit card repayments, bills and everyday expenses like petrol and food.
Does your income cover your expenses? If not, go back through your list and find ways to cut back on spending, like making coffee and lunch at home instead of buying them, cutting back on smoking or cancelling your magazine subscription.
9. Cut up your credit cards
Every time you use your credit card you are putting yourself further and further into debt.
You are using money you haven’t earned yet and having to pay it back with interest. Pay your balance out and then start putting that money into an account with a debit card attached.
This will allow you to still make purchases on the internet and over the phone, but you are using your own cash instead of borrowing it from the bank.
8. Pay more than the minimum
Banks love minimum repayments because that is how they earn their money.
By paying just $10 more than the minimum repayment on your loan you can shave years off the life of the loan and save hundreds of dollars in interest.
7. Review your spending habits
Unlike Maths and English, proper money management skills aren’t taught to us in school. Instead we are left to learn by trial and error.
Unfortunately for most of us, this trial and error leaves us with unhealthy spending habits which get us into serious debt trouble.
Rather than going cold turkey and trying to change a million bad habits at once, integrate good spending into your routine.
Develop a strong banking structure with accounts which accommodate your spending needs, follow your budget, avoid unnecessary spending, open a savings account and so on.
Whatever you do, stay committed and if you need an extra push, tell your family and friends about your plan and they will help keep you focused.
6. Cut back on the little things
Do you really need your coffee from a cafÃ© or would it be better off investing in a coffee maker at home?
Smoking is bad for your health as well as your hip pocket, that’s two great reasons to quit.
Is eating out the most affordable option or could you have a ‘bring a plate’ dinner party at home instead. With a little creativity you would be surprised by what you can cut back on.
5. Avoid the after-spend guilt
Buying something new always seems to cheer you up. But when it comes time to pay for a bill and you fall short, the silly spending guilt kicks in.
You can easily avoid this horrid feeling by never buying on impulse. If you see something you like or feel you ‘need’, go home and think about it over night before you go back and get it.
This will give you time to check your budget, think about if you really need it and make sure it won’t take money away from essential spending like bills or loan repayments.
4. Consolidate your debts
Do you have several credit card debts all accruing interest and fees?
A consolidation loan will allow you to pay out all the balances, leaving you with the single loan repayment with a single lot of interest and fees. It could save you hundreds.
3. Shop around for a better deal
The RBA has slashed the cash rate in recent months. Did your bank pass on the rate cut or are you still paying interest through the nose?
There are plenty of financial institutions out there who are willing to play fair and pass on the interest cut backs to help you, the consumer.
If your bank isn’t being competitive with fees, it’s time to shop around. In 2011, the Federal Government put a stop to banks charging exit fees for people who want to refinance.
2. Find more money
It is easier said than done to pull extra cash out of thin air, but the internet can definitely help. Sites such as Groupon and Grabone have amazingly discounted offers each day.
These include haircuts, beauty treatments and dinner deals. If you don’t want to sacrifice your little luxuries to your budget, wait till a great deal comes up and get it at a reduced price.
Ebay, Gumtree and Even the Facebook page Sunshine Coast Stuff for Sale have heaps of good quality bargains.
If you need anything for around the home, check these places first. Turn your hobby into a cash cow by selling your wares at the local markets or sign up to become an Avon, Tupperware or Intimo salesperson to earn a little extra pocket money.
1. Ask for help
Don’t suffer in silence. Almost 70% of Australian’s have admitted to feeling financial stress.
If you are struggling to make ends meet, you are not alone. Personal Debt Management companies, like Debt Rescue have experienced Case Managers on hand to find a positive solution to your debt.
It’s free to talk and we will find a solution to fit your situation rather than a one size fits all financial plan. If you have bad debt, you have nothing to lose and everything to gain.
Call 1800 00 3328 and Talk to An Aussie Who Cares.