Conquering your debt woes

It’s amazing how easily debt can sneak up on you. Maybe you started out with the best intentions of paying off your credit card balance every month, but then your water bill, electricity bill, mortgage or rent payments all fell on the same month. Then there were the times that your car unexpectedly needed servicing or your car registration and insurance was up for renewal and you didn’t have enough savings to fund the cost.

Here are some signs that you may need to manage your debts more carefully.

  • You pay for most things on credit rather than using your own money.
  • You’re continually maxing out your credit card/s.
  • You don’t keep track of your discretionary spending, particularly your credit card purchases.
  • You’re spending more on your credit card than you’re repaying.
  • You struggle to meet or only make your minimum required repayment on your credit card/s or other debts.
  • You don’t have a budget to keep track of how much you earn, what you spend it on and how much you have left over for savings or to repay your debts.
  • You don’t have any savings to cover unexpected expenses such as medical bills or general living expenses if you become unemployed.
Sounding familiar? There are a few things you could do to get on top of your debts and stay in control.

Be thoroughly informed about your debts

The harsh reality is there’s only one way to control debt - spend less than you earn and use whatever’s left over to pay back the money you owe. The first step to bringing your debts back under control is to take a closer look at your current debts.

Consider these questions:

  • How much money do you owe on each debt and what do they all add up to?
  • How much interest are you paying for each debt?
  • How long have you got to pay them off?
  • What are the fees and charges you’re paying for each debt?
Consider a debt consolidation loan

If you have multiple debts including credit cards or store cards, loans and lease agreements - such as those on household appliances, you may find that consolidating your debts into one loan could be much more manageable and affordable for you.

One of the most popular debt consolidation options is to take out a personal loan. As they often have lower interest rates, you could reduce your interest and pay off your debts sooner. In addition, you’ll only have one regular payment to worry about instead of juggling multiple debts, saving you time and the hassle.

Visit CommBank for more information on debt consolidation loans.

Important information: The advice contained in this article is for general information purposes only. It has been prepared without considering your objectives, financial situation or needs. You should, before acting on the advice, consider its appropriateness to your circumstances. Commonwealth Bank of Australia ABN 48 123 123 124. Australian credit licence 234945.