Six tips for the bud­get blues

Central Telegraph - - REAL ESTATE -

DEBT is a nec­es­sary evil for many Aus­tralians, but you don’t have to let it rule, or ruin your life.

Here, Her­itage Bank of­fers some handy point­ers on man­ag­ing your debt more ef­fec­tively.

Re­view your bud­get

A GREAT place to start is re­view­ing your bud­get and set­ting re­al­is­tic goals and ex­pec­ta­tions for your fi­nances.

En­sure all ex­penses are in­cluded in the bud­get, in­clud­ing loan re­pay­ments.

Re­view your gen­eral spend­ing and look for ar­eas of im­prove­ment.

Once you’ve pin­pointed spend­ing you can re­al­is­ti­cally cut back on, you can then set a bud­get to guide your liv­ing costs and fixed ex­penses.

Not all debt is bad debt

IT IS im­por­tant to un­der­stand that debt can also be used as a pos­i­tive tool in grow­ing your wealth.

Tak­ing ad­van­tage of in­ter­est-free pe­ri­ods on credit cards and get­ting the best rate pos­si­ble for loans can be in­cor­po­rated pos­i­tively into a fi­nan­cial strat­egy.

A fi­nan­cial plan­ner can help with in­cor­po­rat­ing your debts into a strat­egy to help make the most of your fi­nan­cial sit­u­a­tion into the fu­ture.

Pri­ori­tise debts to pay down first

PRI­ORI­TIS­ING the pay­ment of debt higher in in­ter­est makes sense.

It might also pay to look into whether con­sol­i­dat­ing high in­ter­est debts into one debt will help you save money and pay off the debt sooner.

Make use of in­ter­est-free pe­ri­ods

IT IS pos­si­ble to use a credit card as an in­ter­est­free loan.

It’s im­por­tant to un­der­stand the loan terms of the card to en­sure you are in fact bet­ter off in the long run.

Un­der­stand when you have to pay the money back and what will hap­pen if you don’t

You can gen­er­ally avoid pay­ing in­ter­est by pay­ing off the amount own­ing in full each month.

Keep an eye on in­ter­est rates

KEEP­ING an eye on in­ter­est rates, un­der­stand­ing in­ter­est rates and switch­ing your loans to take ad­van­tage of good rates could all work to­wards sav­ing you money.

It’s im­por­tant to re­mem­ber to look to all the in­for­ma­tion when shop­ping around for in­ter­est rates.

For ex­am­ple, you may find a rate with a 0% in­ter­est off-pe­riod to be­gin with, but the rate at which you pay af­ter that pe­riod may be sub­stan­tially more than an­other of­fer – cost­ing you more in the long run.

In­ter­est rates and of­fers can be con­fus­ing, so talk to some­body who can help you un­der­stand what is be­ing of­fered.

If you are still un­sure, seek fur­ther clar­i­fi­ca­tion and help.

Seek help from your lenders

DO NOT hold back from talk­ing to your lenders if you are find­ing it dif­fi­cult to make re­pay­ments due to a change in in­come or emer­gency spend­ing.

By talk­ing to your lender you may find ways to help con­sol­i­date debt and re­duce the amount of in­ter­est you are pay­ing.

PHOTO: ANTONIOGUILLEM

DOWN WITH DEBT: Re­view your bud­get to see what changes can be made.

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