Never thought you’d be in trouble financially at this stage in your life? Well, you’re not alone, and the good news is there are solutions! Here are our top tips to help you get your finances back on track!
- Establish your current financial situation – as much as the thought of reviewing your financial statements may make you cringe, it’s important to know how much you owe, and who you owe money to. Once you know your starting point, then you can chart a course of action to get out of debt.
- Set a budget – assess your income and expenses and set a budget that realistically allows you to cover your bare minimum expenses with a small buffer for the unexpected ones. Account for paying at least your minimum debt repayments.
- Set up an emergency fund – unexpected life expenses are going to happen! So, you don’t fall off the budget bandwagon having to take money from other areas, save at least $1000 as a financial buffer. Once you’re out of debt, then look at increasing this amount.
- Set financial goals – once you have the bones of your personal financial strategy in place, it’s time to set up your financial goals. Setting financial goals is important for maintaining your motivation on those days when you wonder why you’re working so hard to get out of debt. Whether it’s saving for a house or a holiday, this light at the end of the tunnel will help you to make it through.
- Pay down your debt – there are various methods of paying down debt! The snowball method is quite popular for those with multiple debts, and by starting with the smallest debt first, you will build momentum quickly. Alternatively, with the avalanche method, you start with the highest-interest debt first. This method is slower, but you will end up paying less interest in the long run.
If it’s not realistic for you to payoff your debts in a reasonable time (5 years), a professional debt solution might be worth considering. Contact SRMC on 1300 781 850 for more information.