Weathering the Financial Storm

 

 

Debt doesn't just appear out of nowhere, it builds up slowly over time, gaining momentum and pressure until it becomes so huge and unmanageable, the only thing you can do is bunker down the hatches and ride it out.

With the proper preparation and planning your debt doesn't have to become a financial Frankenstorm of epic proportions. In fact if you act early enough you can get your finances back on track with nothing but a light sprinkle. The key to this is recognising the warning signs of debt, get the right support and make decisions.

The tell-tale warning signs of an impending debt storm include the following:-

  1. You have no idea what the total of your debts are
  2. Credit cards are sitting at or dangerously close to the limit
  3. You are struggling to pay minimum monthly repayments
  4. You need a cash advance from one card to pay bills or other cards
  5. Pay day can’t come soon enough but there never seems to be enough
  6. Avoiding your mail box / inbox
  7. Hiding purchase or accounts
  8. Your partner has no idea of your debt levels
  9. Savings are non-existent or evaporating quickly
  10. Your latest loan application has been declined
  11. Relying on family / friends for cash
  12. Not being honest with yourself or others about your debt situation
  13. Using credit for daily necessities
  14. Losing sleep, feeling anxious and overwhelmed by your debt situation

If you recognise these behaviours in your day to day life it's time you take a good look at your finances and ask if you are really under control. If you feel your debt situation is getting out of hand you need to take immediate action to turn your life around.

Getting on top of your debts can be as simple as changing your spending habits. Here are a few tips to conserve your money, reduce your spend and monitor your debt so you can keep it under control:-

 

Itemise what debts you have

Sounds simple however many people have no idea of what they owe to who. To tackle your debt you need to know what you are facing. Get in touch with what your debts are, collate your statements and total it up. Surprised? Most people are.

 

Keep your eye on the ball

Now that you are aware of what your debts are, repeat this exercise next month. Sounds basic, however the basic stuff works. Did your debts go up or down since last month? Are you noticing any trends ie: days of the week when spending peaks? Emotional or personally challenging times when your spending increases? What kind of adjustments can you be making to avoid a repeat of this exercise next month?

Impulse purchasing

Most excessive debts are closely linked with impulse purchases, you know the kind - seemed like a good idea at the time, too good a deal to pass up, pressure sales, upsold by a pushy sales person. If you are making a purchase, make it a conscious one, this goes a long way to avoiding excessive debt.

Set a budget rather than a wishlist

For most people a budget is akin to swearing at them, most have an idea of what kind of features they would like in their new car/ home/ holiday rather than looking at their budget and getting the most value for your dollar. If you have $25,000 to spend on a new car or can afford $500 per month in repayments have a look in that market for your purchase, don’t go tempting yourself in the next pricing category, you and the sales person will talk yourself into something you simply cannot sustain which will ultimately cost you more on many levels.

Easier to acquire debt than to repay it

The key to avoiding excessive debt is being conscious about when you obtain it in the first place. If you need a credit card for emergency purposes then set a realistic limit. Don’t take up the offer of increasing limits when offered by credit card providers, it is up to you to exercise some restraint and take responsibility for your purchasing habits.

Do the maths

If the only way you can buy the new plasma TV is on interest free, work out the repayments, how much do you need to put away to avoid the 30% interest rate when the interest free holiday is over, what is going to change in 24 months for you to be able to afford this.... the big question, do you REALLY need this?

For more information on avoiding debt or for help with reducing your debt visit Debt Rescue.

You haven't got mail

 

For most of us, the idea of an empty mail box is a boring and lonely prospect. But for thousands of Australian's suffering from financial stress an empty mail box is the pinnacle of happiness.

"It's nice going to the post box now and not being inundated with arrears letters and letters of demand. It's been a big relief".
 

This quote comes from a man who has recently contacted Debt Rescue for help with his financial situation. He like many others suffered in silence with his mounting debt until it became too much to bear.

By the time he contacted Debt Rescue his debt was so severe he qualified for a Debt Agreement. It is now four years on and his Debt Agreement is fully repaid and he is living free from debt. 
While Debt Rescue is happy to offer solutions such as Debt Agreements, the company beleives nothing is more important than a proper financial education.

Whether you worship it, have it or couldn't care less about it, money is a crucial element in everyday life. We earn it, spend it, invest it, save it, lose it and donate it and if we aren't properly taught how to manage our finances we could end up in a lot of trouble.

If you are in the 70% of Australians who are feeling the pressure from financial stress the first thing you need to do is change your spending habbits:

• Look at your income compared with your expenses - are you living within your means?
• Keep track of everything you spend in a week - are you making unessesary purchases? Is there anything you can cut back on (such as magazines, cigarettes and cups of coffee)?
• How often are you using your credit card? - are you making repayments? If so is it more than the suggested minimum?
• Do you have a savings account?  - how will you cope if you suddenly lose your job or face an unexpected expence?
• Plan a budget - it is the most essential tool you can use to get on top of your finances. Make sure you stick to it.

If you are looking for help with a budget or positive solutions to tackle your debt call Debt Rescue on 1800 00 3328 or visit our website.

Debt Consolidation

Free yourself from debt through consolidation

Do you have bills piling up at home? Are you starting to feel the pressure from financial stress? Do you feel like your debts are becoming unmanageable? Consolidating your debts is a very realistic way to get your finances under control.

At the moment you are probably juggling several monthly repayments to cover a number of different debts. It seems as though every Australian needs at least one credit card, personal loan, car loan and a mortgage to lead the fantastic Aussie lifestyle we all know and love.

When these bills become unreasonable and your repayments only seem to be making a tiny dent each year you may want to consider tackling your debt head on.

Consolidating your debt

Debt consolidation will eliminate your individual debts and leave you with one loan, one repayment, one set of loan fees and charges and one interest rate.

This works by applying for a debt consolidation loan through your existing or a new lender. The amount you borrow will be enough to pay out each of your individual debts in full. Then you are only left with your consolidation loan to repay.

There are several benefits to consolidating your debts, but there are some things you will need to consider also.

Why debt consolidation?

The benefits include the opportunity to reduce the amount you are paying each month on your debts and saving money on the interest you pay. The money you save can be put to better use elsewhere. The new loan could either shorten the amount left on your debts, getting you out of debt sooner or it could give you a little more time to pay it off so you can breath and relax. The one regular repayment is much easier to handle so you aren't juggling your funds and stressing over what to pay on each loan.

Things to consider

However, there may be fees involved in breaking old loans as well as setting up a new loan. You should ask each creditor about breakage fees before you decide to consolidate the debt and shop around for a credible consolidation loan lender.

If you are considering consolidating your debts to get back on financial track visit our Debt Consolidation fact sheet or call 1800 00 3328 and Talk to An Aussie Who Cares.