Millions of Australians with substantial debt hangovers have been scrambling to start the year with better financial habits and pay off their debt. But changing habits is hard.
Setting realistic targets and getting more creative about budgeting means you’re more likely to make those money-saving resolutions stick says the budgeting app WeMoney’s founder, Dan Jovevski.
Changing your habits if you’re a regular borrower can be hard, but there are methods you can use to help slash your debt.Credit: Fairfax
“Whether it’s getting rid of debt, saving for a house deposit, or simply making ends meet in our current cost of living crisis, everyone can improve their financial position,” he says.
“But it’s not about slashing your weekly budget to a level that makes you miserable, you need to be realistic to make it work.” Here are some strategies that can help you pay down your debts.
List your debts. The first step is to face facts and make a list of all the debts you owe, according to the government’s Moneysmart website. Make sure the list includes buy now pay later loans, credit cards, loan repayments, unpaid bills, fines and any other monies owed.
Make a budget. Next, make a budget so that you know exactly how much it costs you to live, what your minimum repayments are so that you can work out how much you can afford to pay towards your debts based on your current salary.
Once your debts are paid off, build a savings buffer to avoid bill stress.
Accept that financial stress is common at the start of a new year, as an overreliance on credit to get through the holiday season is common, Amy Bradney-George, credit card expert at Finder says.
“Set little goals along the way, so you’re able to track your progress over time and stay motivated – just like you might set for health and fitness,” she says. To tackle the debt, consider some of these popular debt repayment strategies:
Snowball or avalanche? How to pay back those stubborn debts
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26.03.2024
Millions of Australians with substantial debt hangovers have been scrambling to start the year with better financial habits and pay off their debt. But changing habits is hard.
Setting realistic targets and getting more creative about budgeting means you’re more likely to make those money-saving resolutions stick says the budgeting app WeMoney’s founder, Dan Jovevski.
Changing your habits if you’re a regular borrower can be hard, but there are methods you can use to help........
© The Sydney Morning Herald
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