In times gone by it has been generally accepted in Australia that when talking to friends and family we don’t mention religion, money or politics. More recently, religion and politics are fair game (and hasn’t that led to some interesting family get togethers!) Money however, still remains a little bit taboo.
One of the biggest areas of finance that people don’t like to talk about is debt. Debt, debt, debt. Let’s break the taboo and get used to talking about debt.
Grabbing a hold of your debt is one of the 9 steps we teach to get control over your finances.
Hiding from your debt will not serve you in the long run, even if you have a lot of it.
Many people supplement a lifestyle they want by taking on large amounts of debt, this can soon spiral out of control. Whether this is you or you just have a manageable mortgage, handling your debt in the right way is very important to your overall financial success.
How do you grab a hold of your debt? Let's have a look at three steps.
Firstly you need to know what it is that you owe.
Grab a pen and paper and write it all down. Draw a table with four columns. The first is headed ‘debt’, this is where you will put what kind of debt it is. The second can be named ‘who’ this is the bank or lender. The third ‘how much’ which is or how much you owe and the firth ‘interest’ this is for your interest rate.
Start listing your debts. Start with your mortgage, then look at car loans, personal loans, credit cards, Hecs or HELP student debt and don’t forget loans from family and friends.
Now you know how much you owe, don’t be scared. It's best to attack your debt with the full knowledge of where you stand.
The next step is to make sure that you are not paying too much. There are heaps of different lenders in the market place, the loan that was right for you a few years ago may
not be right anymore. How do you figure this out? It can be time consuming doing it yourself. You can get on the internet and look at different providers and how much they charge. If you do this, be sure to look at the comparison rate. A comparison rate takes into account the interest rate as well as any fees applicable to the loan. This helps you compare apples with apples.
If you don’t want to do it yourself, our in house broker is happy to assist you. A mortgage broker is someone who has access to a range of lenders and can help you get the right deal.
A debt check-up is cost and obligation free, if you’re interested get in contact firstname.lastname@example.org or call 1300 592 539.
Our broker, Neeliya, can assess whether you are paying too much interest or if the loan you have is the best for you.
Getting a lower interest rate on your loan products can make a big difference to your overall costs.
Once you are sure that you have the best loan products for you. Put a repayment strategy in place to get rid of your debt all together.
For personal debts you can access our ‘Credit Cards are Killing you’ strategy paper HERE.
Paying down your mortgage and investment loans form part of your overall financial plan. Although on a very simple level getting rid of the credit cards and redirecting those payments to your highest interest, non-deductable debt is a good place to start.
1: Find out what you owe and what you are paying
2: Find a better deal
3: Put a repayment strategy in place.
For more information on getting a hold of your debt, or to talk to our wonderful mortgage broker Neeliya please get in contact with our office.
We hope you will enjoy the freedom that being in control of your debt allows you.
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Ben Graham-Nellor is an advisor, coach, blogger and speaker who has worked in the financial services industry for over 15 years. He believes that by educating and advising people today, they can improve their tomorrow.
BGN Financial Management Pty Ltd is a Corporate Authorised Representative 468796 of Professional Investment Services Pty Ltd AFSL 234951 ABN 11 074 608 558 www.centrepointalliance.com.au
The information in this communication has been prepared on a general advice basis only. The advice has been prepared without taking account of your specific objectives, financial situation or needs. Accordingly, you should, before acting on the advice, consider the appropriateness of the advice having regard to your objectives, financial situation and needs. In cases where the advice relates to the acquisition, or possible acquisition, of a particular financial product, you should obtain a Product Disclosure Statement (or other relevant information statement) and consider such document before you make any decision about whether or not to acquire the product. For these reasons, it is imperative that you seek advice from your financial adviser before making any investment decisions.