When debts are hard to pay and it becomes overwhelming, you may find yourself juggling who to pay and when. In this moment, prioritise yourself and your family and their needs.
Having a roof over your head is important, as is keeping food on the table and the lights on. But you cannot ignore the other less significant (to your life!) debts either because these can escalate and lead to bigger problems down the track. Here are some tips to help you.
1. Create a list of what you owe
The first step is to get a clear picture of what you owe.
Make a list of all your debts, showing:
- how much each debt is
- the minimum monthly repayment (if any)
- when the payment is due
Then add up all the debts to see how much you owe in total. If it feels a bit overwhelming at first, remind yourself that you’re taking charge of your money. And that’s a good thing.
2. Get help if you need it
If your list shows that you owe more than you can afford to pay, resist the temptation to apply for another loan to cover the shortfall. It may seem like a good short-term solution, but it just increases the amount you owe.
To get free, confidential help, call the National Debt Helpline on 1800 007 007.
3. Work out what you can afford to pay
The next step is to work out how much you can afford to pay towards your debts.
Compare the money you earn to the amount you need to pay
The easiest way to do this is to create a budget.
List all the money:
- coming in (income) — such as salary, pension or benefit payments
- going out (debts and expenses) — like food, rent or mortgage, buy now pay later, credit card, electricity, gas, phone, transport
Add these up, then compare money in and money out.
4. Make savings or cuts
If you are struggling to pay your debts, it’s likely that you have more money going out than coming in. Is that the case? If it is, your next step could be to think about the things you can’t do without (e.g., shelter, food, electricity) and the things you may be able to do without or have less of (e.g., alcohol, lottery tickets, expensive clothes).
Find some expenses that you can cut. Be realistic — don’t make it impossible to stick to. Once that is done you may have a clearer picture of the amount you have left to pay your debts.
5. Plan your higher-priority payments
Plan to pay your higher priority payments first, and if you don’t have enough to cover those repayments, contact your provider. Ask if you can get some immediate short-term relief like an extension or to pay in instalments or ask for a formal hardship arrangement with your provider which will require you to provide some proofs about your financial situation.
If your debt situation is still overwhelming and you have explored the fee free options to resolve your debt, we are here to help. Contact Solve My Debt Now and our friendly team will step you through your current situation and provide solutions that may assist.
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