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Paying for holidays after the fun’s over

The holidays are over and you’ve had a great time. The dreaded credit card statement has arrived and you wonder how you’re going to pay it off. The happy holiday memories suddenly disappear.

Unfortunately there are no magic ways to wipe out debts – it just takes discipline.

Paying off credit-card debt quickly requires more than paying off the minimum each month. Most credit card providers require you to pay around two percent off the balance each month, although they are required to outline how much more you will pay if only the minimum is paid

With interest rates averaging around 13 percent, sometimes more, most of your payment will pay some of the interest with only a small part reducing the debt. It will take literally years to pay it off.

Quite simply, you must pay more than the minimum and here are some ideas to help you do that:

• Hide it before you spend it. Arrange for an automatic transfer from your pay to a separate account so you never see the money.

• Use that account to pay off the debt or debts. Alternatively, schedule an automatic deduction from your cash account to your credit card every pay day. If money isn’t there, you can’t spend it.

• Save the little bits. Put all the coins you get in change into a savings jar. Preferably one you can’t open like the piggy bank of your childhood. You’ll be surprised how quickly it adds up and every time you add to your pot, you’ll be reminded of your goal. When it’s full, attribute the entire contents to your debt.

• Sell something. Everyone has things we really no longer need – forgotten gym equipment, a bicycle we never ride, an unused musical instrument, and so on. Do it online, or have a big clean out and stage a garage sale.

• Spend less. Careful spending doesn’t need to impact on your lifestyle.

Try these ideas to save money – check the supermarket catalogues and buy the brands on special; cook at home rather than eating out at restaurants or buying take-away; and lay-by birthday and Christmas gifts during the store sales.

Other ideas are:

Check out upmarket clothes recycling stores; they often have designer clothes at bargain prices. No-one will ever know!

Use windfalls. Every now and then a chunk of money comes your way – back-pay, a bonus or a tax refund. It’s okay to give yourself a treat but put most of it towards your debt.

Ask for help. If all else fails, talk to your credit-card provider about ways to pay off the debt. They want to be re-paid and may be prepared to make special arrangements for you.

If you need more advice about repaying debt, speak to your financial adviser.

• Robert Goudie is an authorised representative at Meritum Financial Group Pty Ltd AFSL 245569.



COMPETITION TIME AGAIN!!!!!! Our monthly DINNER FOR TWO competition is on again. ‘SHARE AND LIKE’ this week’s video on Facebook for your chance to go in the draw to win a dinner for two at a Local restaurant!!!!!!!!!!!!!!!

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Posted on Aug 29 2014

Posted by on Aug 29 2014. Filed under Finance advice. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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