Top 10 Budgeting Tips To Control Debt

1. Before you go shopping, write a list… and if it’s not on the list, don’t buy it!
2. Keep all shopping receipts over a few weeks and work out an average of your spending, as it is unlikely that you will spend exactly the same amount each week.
3. Keep a notebook and jot down each and every item you buy each day.  Eg. Make sure you include your take away coffee, the sandwich at lunch and the afternoon chocolate treat!
4. Assess your real necessities and cut out luxury items until your debt in back in control.  For example:  pay TV, socialising, and adding to your wardrobe are considered luxury items.
5. Credit card debt:  Do you have more than one credit card?  If so, you are paying more than one interest rate.  If you must have a credit card, limit yourself to one card only and shop around for low rate or interest-free-period cards.  This includes store cards!  Consider a switch to a debit card completely and shop with your own money.
6. Try to clear the balance of your credit card each month to avoid interest.  If you can’t clear the balance, try to pay more than the minimum payment to limit the interest charged each month.
7. Loans and other credit:  If you are juggling various credit facilities you are also paying more than one interest rate. Try to roll them together into one loan and thus one manageable repayment.
8. Set out your household budget and stick to it!  Don’t forget to include insurances, utilities and hire purchase payments.
9. Car loans:  Consider whether you need to have an asset which is depreciating in value faster than the loan you are repaying.  Perhaps downsizing is the answer?
10. Don’t be afraid to ask for help before it’s too late!  If you have attempted loan consolidation and spoken with your creditors, there are still other debt solutions to be explored.

Technical Recession Avoided?

Recent figures released by the Australian Bureau of Statistics show that Australia has avoided a recession, demonstrated by the gross domestic product showing a marginal increase of 0.4 per cent in the first quarter of this year.

Although the recession has “technically” been avoided, this news will not help those Australians who are still struggling with debt.

Many people still find themselves in jobs which are “at risk” or have been laid off already which means that the stimulus package monies have probably already been spent in the wake of rising household costs, petrol costs and credit commitments.

When it comes down to feeding the family or paying a credit card debt or loan, it is obvious some Australian families are having to make hard choices.  These decisions leave them feeling they have no option left but to file for Bankruptcy, not knowing that there are alternatives to bankruptcy, such as a Debt Agreement or Loan Consolidation.

“Life shouldn’t be a struggle.” says Natalie Levett, Associate Director at Australian Financial Solutions. “There are alternatives out there and people need to be aware that bankruptcy can be avoided as long as you get help sooner rather than later.”

Credit Sending Aussies Broke

EXCESSIVE use of credit and credit cards has contributed to a leap in the number of personal bankruptcy cases. Figures from the Insolvency and Trustee Service of Australia show that there were 9,300 new bankruptcies, debt agreements or personal insolvency cases in Australia in the first quarter of 2009, an increase of 18.25 per cent on the same period from the previous year.

The main causes of personal insolvency were unemployment and excessive use of credit. The vast majority of bankruptcies were non-business-related personal bankruptcies. Credit cards should not be seen as the simple cause of bankruptcies because unemployment or ill-health could contribute to a greater reliance on credit and therefore various reasons for insolvency.

The report showed the occupations most likely to be affected by bankruptcy, debt agreements or personal insolvency were clerical workers, service workers, labourers, and mine workers. Marketing and availability of credit cards leads to people spending more than they can afford. People are sometimes offered more than 10 times the credit they ask for, and then they are encouraged to spend it, or they are sent a pre-approved credit limit increase.