Getting on top of your Debt

Sponsored by People’s Choice Credit Union

If I had to guess, I’d say in your typical group of twenty-something males, at least 80% are in debt (excluding home loans). ‘Debt for Life Crew’, is what we dubbed our friendship group many years ago. It was no doubt directly linked to our other moniker, ‘No Work Crew’, as many of us finished our final years of University and worked casual jobs. Despite not having consistent income, none of us made lifestyle sacrifices (obviously), and for the majority it was credit cards that took the full brunt of holidays, shopping, boozing, festivals and entertaining love interests. For many young males, entering our late twenties with a solid foundation of debt (plus outrageous rent and living costs) has meant living pay cheque to pay cheque, with the inability to save.

If, like myself, you had a similar youth with credit, and are still pumping your credit card with online shopping orders, expensive dinners and huge nights out, getting on top of debt is crucial before buying a property with a sizeable mortgage. Outside of sensible future planning reasons, being free of debt is also good for your soul. Here’s some options for getting on top of your debt.

Transfer your debt:

As you may know, I’ve become very interested in the Frequent Flyer community in the past two years. There’s people out there who apply for, and transfer debt, from one card to another every year, across numerous cards, taking advantage of no interest terms and sign up bonuses. No interest terms for 6 months or a year can save you a lot on interest repayments while you go about paying off your card. This point does however require you to be sensible with your new card. Minimise spending!

Establish a budget and savings plan:

Lots of online banking services will show you what you’re spending your money on across various categories, be it rent, bills or dining out. This makes it easy to get an idea of what you’re spending per month. Decide what you can cut back on, set out a weekly budget and try to limit yourself to that amount. Work out what’s left and automate a monthly payment straight to the card or to a savings account for transfer later.

Get a personal loan:

If you’ve got a large debt or multiple cards, a personal loan with a much lower interest rate than your card is a smarter option than trickling in small payments and getting stung by interest. Look for a personal loan with a competitive fixed rate, flexible repayment options and no monthly fees.

Communicate with creditors and seek advice:

Contact your creditors and explain your situation, then set a payment plan – they will welcome your initiative. If the idea of  sorting out your finances is more than you can manage alone, free and independent help is available. Financial planners and counsellors can be an invaluable resource to help you work through your situation.

Grow up:

More than likely, it’s as simple as making better decisions. Stop trying to compete with your mates who earn twice as much as you. It’s not going to matter if you miss a Wednesday night dinner at Bistro Moncur with your two mates who eat there weekly. If there’s any inkling that something might be a stretch on your finances, you’ll thank yourself later by giving it a miss.

To help give your credit card a break, The Versatile Gent and People’s Choice Credit Union are giving you and a friend the chance to win a prepaid $250 Visa card each, to spend on anything you wish. Take a quick browse of the Terms and Conditions below then head to our Instagram page to enter!

Terms & Conditions:
– You can enter multiple times as long as the tag is a different Instagram account per entry
– You must enter via Instagram, no other social channel of The Versatile Gent is included in this competition
– The winner will be selected at random and announced via Instagram
– The competition will close on 15/10/2015 at 5pm AEST.

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James is the Founder and Editor of The Versatile Gent.

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