How to get your finances back on track
Have your New Year’s money resolutions slipped already? With January firmly behind us, many of us may be wavering on the New Year’s resolutions we made with such good intent just a few weeks ago.
That said, there’s no point in giving up altogether.
Now is a good time to take stock of your finances, and to seize the opportunity to set some new financial goals.
Review your debts
First off, you should go through all of your debts with a fine-tooth comb and write down exactly how much you owe on all of your credit cards, store cards, loans and overdrafts.
Also find out the rate of interest you are paying on each of your debt. Once you’ve done this, your priority should be on paying off those with the highest rate of interest.
Play your cards right
If you’re struggling to clear your debts, now could be a good time to consider a balance transfer card.
The key with these cards is to pay off the balance during the 0% per cent period to avoid paying interest.
This should offer you breathing space so you can clear your debt, without letting it spiral out of control.
If you have a balance accruing interest at the average rate of 17.9 per cent APR and move your balance to the market-leading card, you could save $824.73 in interest charges over 25 months.
Check your credit report
If you’re taking stock of your debts, now is a good time to check your credit report.
With many lenders still being very selective about who they will lend to, having a good credit record is more important than ever.
This could make a difference between you being accepted or rejected when applying for credit cards and other forms of credit.
You can request a credit report for free from Equifax. Armed with this information, you can then take steps to improve your score.
Don’t panic – get professional advice
If you’re struggling with monthly commitments, then now may be the time to ask for help.
The key is to talk to your creditors as soon as you can.
By explaining your situation before you default, lenders are likely to take a more sympathetic approach and help you renegotiate a realistic payment plan, or stop-gap payment holiday
Overpay your mortgage
For most of us, our biggest debt is likely to be our mortgage, so make it one of your goals to make small over payments. Even just paying a little extra each month will help you clear your mortgage more quickly.
Start saving $50 a month
One of the simplest ways to get into the savings habit is by setting up a direct debit so that $50 goes out of your current account on the day after payday.
Finally, once you’ve set your new goals, remember to revisit your financial decisions at least once a year to make sure you’re still on track.