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New Year, New Debt? How to Manage Your Expenses

We are well into the new year where many of us have started to ease back into our day-to-day routine, trying to stay on top of our expenses, while still feeling the effects of the previous month’s constraints. Many of us consider this time of year an opportunity to focus on making improvements to our well-being and may overlook our financial health.

You may have somehow found yourself with unprecedented debts, and wondering how to manage your new debts while keeping up with your current expenses. Although having good debt can improve your financial health, too much of the wrong debt can affect your ability to achieve other goals. We have some debt advice on how to manage your expenses.

Know How Much You Owe

Naturally,  the first thing you would want to do is pay your debt off right away, however, before you consider doing that, it is important to have a clear understanding of how much you owe. This will help you see the bigger picture and stay on track with your debt obligations.

You should make a list of your debts that include the following information:

  • Different creditors you owe
  • Total amount of debts
  • Monthly payments you make for each
  • Date payments are due
  • Interest rates

When your list is made, you can use it by referring back and updating it as your debt reduces – Keeping your list updated will allow you to always have a clear mind of how much you owe and which debts to prioritise.

Pay What You Can Afford

Your debts and bills will typically have a minimum payment option, which you can consider making smaller manageable payments, as they contribute towards the larger debt. Instead of sacrificing your positive and healthy accounts, pay what you can afford, as late or missed payments can make your debts more difficult to catch up with and will put you in a position where you could require debt help. Missing payments consecutively could result in your creditors increasing your interest rate and incurring penalties. Try to stay mindful as you are making repayments.

Should you need more insights into identifying when  debt becomes a problem, please visit our blog for an explanation of how to deal with problem debts.

Check Your Credit Report Regularly

It is important to check your credit report regularly when you have debt, whether it is good or bad, as this could assist you in staying mindful of any outstanding debts. Your credit score can also assist you with understanding your current credit position a lot better and will keep you informed of any factors that may affect your ability to achieve your financial goals.

If you need more information on credit score ranges and ratings, click here to understand how a credit score can affect your financial plans.

Consolidate Debts Where Possible

Debt Consolidation is the process of putting your debts into a payment plan that offers a single payment process with low-interest rates, which can prove helpful when you find yourself with new debts, as you will only have one instalment to focus on.

If you are interested in resolving your new debts through consolidation, you can visit our Debt Movement page where we provide the advantages and disadvantages of this payment plan to help you make more informed decisions. 

If you are struggling with debt and thinking about entering into debt review, Debt Movement is here to offer you non-judgemental debt advice and financial guidance. Request a free call back today with our understanding and caring team.