Personal Debt Consolidation

Personal Debt Tips

At a time when Australians hold on average more than $40,000 in household debt, financing personal debts can be a spooky business. Although this amount is somewhat offset by the increases in asset value holdings, superannuation, decrease incredit card balances and especially home values, cashflow from month to month is a struggle for many people saddled with creditors' bills. Consider these initial steps to putting your personal financial house in order:

Take a picture: step one is to write down a complete list of all your creditors and the amounts you owe to everyone on the list. Be thorough and honest in your assessment, so you'll get a true picture of what's going on with your finances. To drive your personal debt load down, you first have to find out exactly how much you're dealing with.

Get outside help: put together a pay-off plan for your personal debt, and explore your repayment options. In many cases, a financial planner will help you make decisions on your loan paymnets and the way you have been keeping your expenses and cash flow in step with your financial needs. Find out if you can get better deals for your checking account at another bank, or if it's better for you to consolidate your loans into a single account, considering any fees and interest rate frameworks involved.

Pay it fast: personal debt will drag down your household finances if you let it get too high, so devote much time in your plan to pay off your loans, starting as soon as you can. Once you've made a plan, stick to it and get peace of mind from knowing that you're dealing with your financial mountain one step at a time.

Stop spending: spending patterns for many people consist of a series of spikes with long gaps of low consumption in between, corresponding to wi.ndfall events like tax refunds, annual bonuses and pay raises (or the release of personal loans). Retail addiction is anathema to your liberation from personal debt, so quench the urge to walk into a store even for sales. Refocus your attention from the things you'd like to have from what you really need.

Keep watching: guard yourself against backsliding when new credit cards or tempting financial options come along. Take a look at all your statements: credit balances, mortgages, receipts from ATMs and purchases, and savings accounts. See if another bank can give you money-saving deals on your accounts and if you can make the transfer with the least fees, if you should want it.