Eliminating Your Debts

Debt is not uncommon in our society. Most of us get into debt at some stage in our life. We may have to borrow to buy a house or a car or to take a holiday.

It is not debt in itself that is a problem. The problem begins when we find we cannot manage and service debt

Many Australians find it tough to resist the temptation of credit. Many adopt the habit of "spend now and pay later". It is easy to do but at some stage you will have to repay the debt and with the interest added. If you have financial goals then you have to cut costs and boost your savings. The first step toward achieving your financial goals is debt elimination.

Always spend less than you earn

Spending less than you earn is a golden rule to wealth generation. Learn to budget. Write down what you earn and then write down what you spend. Take out all the items that are unnecessary, but allow yourself some money for a few luxuries. Stick to your budget and pay off your debts.

Learn to budget and learn to manage your money and eliminate your debts.

You have to spend less than you earn to truly eliminate debt. Even if you spend exactly the same amount as you earn you will find it very difficult to eliminate your existing debt completely. Remember when you create your budget you will have to allocate some funds for those unexpected events and special occasions, like birthdays and Christmas. Do not borrow money to pay for these occasions.

Now that you are spending less than you earn you can start a savings account and build a nest egg, right?

Wrong.

Direct your savings towards debt elimination.

Many people who have trouble with debt are also trying to save and build a nest egg. Before you can really save you must eliminate your debts. If you save money in a savings account you will earn around 6 percent interest. Even if you invest in stocks and shares the average return year-on-year is between 10 & 11 percent. You pay more than that for debt. Interest rates on credit cards and personal loans can be as high as 20 percent or more. Yours saving can easily be eaten by servicing interest on your debts.

If you are keen to eliminate your debts, use your savings to pay your debts. Use lump sum payments to effectively reduce your debts by reducing the principle and thus reduce the interest. Your savings may even clear you of debt. This gives you a clean slate in which to build up your wealth and also you have saved hundreds of dollars a year on interest that you would have paid if you had continued to service that same debt. With this clean slate you can stick to the system of positive cashflow, begin to save money and stay debt free.

Fox Symes has guided and assisted over 30,000 Australian individuals and families resolve their financial position and regain control of their lives.

If you want to take the first steps toward debt elimination you can contact us on 1300 361 204 for your free debt assessment and further information and assistance on what options may be available to you in your individual situation.

More articles

 

For Australian residents only

If you are employed and have debts greater than $10,000 please call us on 1300 361 204 or fill in this form. We have live Debt Consultants available to help you now.

Fox Symes Contact Form
Salutation
Full Name   
Home Number
Work Number
Mobile Number
Email Address
Postcode
Property Owner? No * Yes
Unsecured Debt ($)
Time to Call
8am - 11am at
11am - 2pm at
2pm - 5pm at
5pm - 8pm at
Fox Symes takes your privacy very seriously.
* We can still assist you if you are not a property owner.

 

 

 



View Fox Symes in The Media