Debt:

• How to manage debt? – It’s a big question!
• First of all, fill out the easy worksheet. Don’t put any debt repayments in your worksheet, except your mortgage or rent payments, student loan repayments, court fines and/or child support.
• List all your other debts on a piece of paper and the total amounts owed. These debts may include credit cards (Visa, Mastercard), store cards (Warehouse Card, Hallensteins, Farmers etc), money owed to family or friends, car loans – anything you owe money for.
• Add up the arranged amount of payment on each one (for instance you may pay $50.00 a month on one credit card, $100.00 on another, be paying a Warehouse card at $30.00 etc. So the total that you’re paying on debt each month in this example = $180.00.)
• Now, put your monthly repayments on these debts into the easy worksheet in the “Debt Repayment” column. (If you work on a weekly budget, the calculator in the Totals column wil convert the monthly amount to weekly when you're finished.)
• Total up your income and spending on your easy worksheet again and see if your budget balances – that is, including your debt repayments, you have at least slightly more money coming in than going out.
• It is important that you are paying off debt regularly, and preferably at a higher rate than the creditor suggests – in other words, if the statement says your minimum monthly repayment is $30, it’s good to pay $35.00 if you can. It helps to pay it off faster and you’ll pay less interest over all.
• If you find that after you’ve added all your debt repayments to your budget, the budget doesn’t balance, and has a minus sign (-) after the result, contact us. We have ways to help you manage your debt more effectively.
• We can contact creditors for you and arrange suitable payments, and in some cases, have interest withheld to help you get ahead. Contact us if you need help with debt repayment.

Contact Your Creditors:

• Most creditors appreciate being contacted if you are struggling with debt repayments. They’ll often come to an arrangement with you. Work out your finances and know how much you can offer to pay. Clutha Budget Advisory Service can help you with this, but you may feel confident to do this on your own. That’s great. Be prepared to stick to the arrangement you make with the creditor. Don’t over-commit yourself, especially if you have quite a few debts. Contact us if you need more help.

Consolidating debt:

• Sometimes, it’s possible to group all your debt repayments together and pay one amount per month to cover them all.
• This can be a good option if done through a bank or other low interest providers.