Six tips to help manage your holiday debt hangover
Christmas and the summer holidays can be a crazy time physically and mentally.
It can also be challenging financially. Whether it is Christmas presents, unexpected expenses or costs from a holiday, it is important to manage your debt and get in control before the year gets going.
Below is a few things you can do to get on top of debt.
1. Work out your debts
Understanding what you owe, who you owe and when it needs to be paid will give you a holistic picture of your current position.
MoneySmart has a handy calculator to enable you to tally all of them up in one place.
2. Set a budget
Setting a budget will enable you to understand what you have, and establish a plan for the next 12 months. Being in control of where your money goes is both empowering and important – it’s all about you knowing your limits.
3. Create a priority list
Once you’ve worked out what you owe, and set a budget, the next step may be to prioritise certain debts. For example, paying off the debt with the highest interest rate will ensure that the amount does not blow-out.
You could also pay one of the smaller amounts, and give yourself a pat on the back for getting going!
Most importantly, do your best to avoid late fees by making minimum payments on your debts.
4. Consider chatting to someone about your options
A financial counsellor may be able to assist you to make a plan. They will also be able to highlight different strategies and paths available to you. You can call the National Debt Helpline on 1800 007 007.
There is also more helpful information from MoneySmart here.
5. Start saving for 2021
If you can, put a small amount aside each week to use in 2021. It could be as little as $10 a week, and by the start of next year you’ll have over $500 to help you!
You could also look for a low interest bank account, and see that money get some extra growth. ME Bank offers an account with a 2.05% return (conditions apply). Learn more here.
6. Talk to us
Our financial advice team can review your financial circumstances and help you create a plan to address your debts that understands both your needs and takes all issues into account.
It’s also important to think about the future – if you’re in debt, would your insurance be able to pay off those debts for your family if something were to happen to you?
No matter how you decide to address your debt, know that you’re taking a positive step toward securing your financial future for you and your family.
If you have any questions, simply get in touch. We’re here to help.