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Your Money & Your Life 5 tips to get on top of your debt – and stay there
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5 tips to get on top of your debt – and stay there

Martin Wanless - June 8, 2021 4 MIN READ
Get on top of your debt

In partnership with

There’s no better time to start getting on top of your debt than right now. It’s by no means easy, but it can be a simple process. Try these steps to identify, prioritise and plan your path over the debt mountain.

1. Get a clear picture of your debt

A common response to being in debt is to bury your head in the proverbial sand. We get it – it’s much easier to ignore it than to face up to reality. But one day that reality is going to come crashing down the mountain to bury you. So, in the long run, it’s far better to pull on your grown-up pants and start hiking into your debt situation, pronto!

The simplest way to do this is to create a spreadsheet (we know, and we’re #sorrynotsorry). List who you owe money to, how much you owe in total, and what the monthly minimum repayments are. If you know the interest rate you’re paying, add it in there – it’ll come in handy later.

 2. Make a budget

To make the picture even clearer, you need to understand your total outgoings and incomings. Open up another tab on the spreadsheet and enter everything you receive – salary or any other income. Then make a new column to add in everything you spend – from your mortgage and rent to Netflix. Don’t forget to include your monthly minimum repayments.

More tips here: 10 killer budgeting strategies

Hopefully what you’ve got coming in is greater than what’s going out. If it’s not, it’s time to make some serious choices. All you’re doing each month is getting deeper in debt.

To really get on top of your debt, start thinking in terms of wants and needs. In your list of outgoings, think about what you need – food, a roof over your head – and what you like to have – Netflix. Unfortunately, some of those things you ‘like to have’ might have to go.

It also pays to look for ways you can reduce your spending on things you need. Maybe you can shop at a cheaper supermarket, change utilities suppliers to chase a better deal, or keep a closer eye on deals and discounts for restaurant and takeaway bookings (thefork.com.au sometimes offers 50 per cent off meals).

3. Prioritise your debt

Once you have your cashflow under control, it’s time to prioritise your debts. Payments to services you need – your rent or mortgage, car repayments, gas, electricity, water – should be top of the list.

If you’re not in a position to meet these or other debts, talk to the lender and request financial hardship relief. It’s always better to communicate in this situation. You will never get on top of your debt if you don’t start a conversation with those you owe money to.

If you can meet minimum repayments and have a bit left over, repay more than the minimum payments on the debt with the highest rate of interest. Meeting the minimum repayments will keep the lender satisfied, but won’t reduce your debt very quickly. If you can pay more than the minimum you’ll be better off in the long run.

Try this: How to break the debt cycle

4. Consolidate your debt

Another strategy to consider is to consolidate your debt. This means taking out one loan and using it to repay multiple debts. By having only one debt and one repayment to manage, getting on top of your financial situation becomes much easier. With a bit of planning, the monthly repayment could well be lower than the combined repayments you’re currently seeing disappear from your bank account each month.

Also, dependent on your credit history and whether the loan is secured or not (a secured loan has some form of security attached, such as a property or vehicle), you may well be able to access a loan with a lower interest rate than you’re getting from some of your other lenders (we told you adding the interest rate to your spreadsheet would come in handy).

More info: Separating fact from fiction: The five biggest myths about credit scores

5. Get to know your credit score

Your credit score is a number between 0 and 1200 (a good score is usually 600 or above). You can find out your credit score on GetCreditScore.com.au for free, and you’ll see how you appear to banks and lenders, and if your score is looking healthy, you should be able to access a competitive interest rate to consolidate your debt.

If it’s not quite at 600-plus at the moment, keep making on-time repayments and check in on your score every now and again – improving it could help you get a better deal and save you money in a reduced interest rate. Note: accessing your credit score via GetCreditScore does not negatively affect your credit score, so it can’t hurt to check.

Find out your credit score for free by logging on to GetCreditScore.com.au – it’s quick and easy to register, and it’s safe.


This article is brought to you in partnership with GetCreditScore.

The information above is intended to be general in nature and is not personal financial product advice. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs. You should seek independent financial advice prior to making an investment decision in relation to a financial product (including a decision about whether to acquire or continue to hold). Pinstripe Media and GetCreditScore are not liable for any loss incurred by use of or reliance on the information.

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Martin Wanless

Martin is an experienced freelance writer and content strategist, specialising in finance, insurance, tech and HR. He’s been creating B2B content in the UK and Australia for over 20 years. Before co-founding his own small business bywanless.com.au in regional NSW, he was head of content at a Sydney agency for the best part of a decade.

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