It is important to know if your finances are heading in the right direction. If you’re going to reach your goals, or just trying to keep your head above water
Budgeting is the key to financial success. Do a comprehensive budget, marking down truthfully your income and expenditure. Include all payments for debts, as this is the one area you should try to reduce.
Map your spending patterns to see where your money does go. For a month, take a notebook with you wherever you go and mark down each item of expenditure – no expense is too small to be included. If other members of your household also spend from your account, get them to do the same.
Make the cut when you ascertain if there is any spending which can be reduced, or cut altogether, to balance your budget or pay off some debt.
Prioritise your debts: Mark down all debts in order of the highest interest items first, as these are the ones you should try to pay off most quickly. If you’re only making minimum payments, it may be wise to consolidate all your borrowings into a standard rate personal loan or a Credit Union loan.
Catalogue your credit card spending: Gather together your credit card statements for the last six months and categorise the types of spending for which it’s used. If you’re using it to pay everyday items such as shopping and fuel and not paying it off each month, then you’re living beyond your means.
Pay on time: Make sure all your bills are paid by the due date. If you’re struggling to pay any of your necessary bills, contact your lender or provider who may be able to assist with hardship provisions.
Don’t ignore your creditors. If you have fallen behind on payments, don’t just bury your head in the sand. Communicate with lenders in an honest way; don’t promise payments you know you can’t afford. If you’re uncomfortable dealing with your creditors, or if you are in financial difficulty, contact MABS who have financial counsellors who can help and in some cases, can contact your creditors on your behalf.