The festive season may be a distant memory, but many of us will still be paying for it well into the new year. According to recent data, Aussie households are grappling with around $2.7 billion in collective Christmas debt, adding to the already high levels of household debt in this country. Recent interest rate drops could provide an opportunity to get on top of this debt. Here are some practical ways to tackle a Christmas debt hangover.
1. Assess your current financial situation
Start with a clear look at your finances. Go through your recent bank and credit card statements to understand your spending and identify areas where you can cut back. Write down all your debts along with interest rates, due dates and minimum repayment amounts for each.
2. Create a realistic budget
Using a budget is vital for managing your money effectively. Ensure that essential expenses – like rent or mortgage, utilities and groceries – are covered first. Then calculate how much you can realistically afford to pay towards your debt each month. Use budgeting apps or a spreadsheet to track your spending and stay within your limit.
3. Consider debt consolidation
If you’re juggling multiple debts, consolidating them could simplify your repayments. Combining multiple debts into one personal loan – or into your mortgage with refinancing - saves you money on interest and fees and makes it easier to manage your finances. Some credit cards offer low or zero-interest rates on balance transfers, reducing the amount of interest you’ll pay, so it’s worth considering these.
4. Take advantage of lower rates
With recent interest rate reductions, explore refinancing options for your mortgage to secure a lower interest rate and reduce your monthly repayments. If you can afford to, keep your repayments the same even when interest rates drop, to help you pay off your debt faster.
5. Get professional advice
If managing your debt feels overwhelming, reach out and get some help. Financial counsellors can provide personal advice and helpful strategies to manage and reduce your debt. Contact the National Debt Helpline at 1800 007 007 for free assistance. Get help creating a long-term plan that aligns with your financial goals, by contacting Mortgage Express and connecting with a finance consultant.
Take control today
If you’re struggling with a Christmas debt hangover, now is the time to take control. Take stock of your current financial situation, create a realistic budget you can stick to, and explore options for debt consolidation. With further interest rate reductions predicted, taking some proactive steps today could help you get debt-free sooner. Contact Mortgage Express to connect with a finance consultant, for personalised finance and budgeting advice.
While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken by Finservice Pty Ltd (Mortgage Express) for any errors or omissions. This publication does not constitute personalised financial advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication. A Disclosure Statement is available on request and free of charge.
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