It's the time of year when we start to realise just how big the hole in our pocket has gotten. Financial stress can be sky-high, but the transition into the New Year is the perfect time to reflect and resolve. If you can find time among the Christmas parties, running around buying gifts and - hopefully - taking time to chill out, the break gives you the opportunity to get started on a financial reset for the year ahead.
Tally up your debts
This, for many of us, is the hardest part of all but it's a great first step: face up to your balances and look your debts straight in the eye. Be completely honest. You can only start to get on top, and stay on top, of your interest and loan repayments when you have a clear picture of what exactly you owe.
Make a budget that incorporates everything
Everyone will budget differently but the fundamentals tend to be the same regardless of exactly how you do it - and you definitely don't need to be a professional bookkeeper to do the sums. Start simple, add complexity later. Tracking both your incomings and outgoings (including those interest and loan repayments), and the net balance, across a week, fortnight, month or year is a great step towards financial freedom. We've created a budgeting tool that will help you plan out your regular spending.
Make a plan to pay things off faster
Paying the minimum is exactly that: it's literally the least you can do and the slowest possible road out of repayment town. Once you've created your budget and found a portion of leftover funds, put these towards your debts. Prioritising the higher interest ones is a good idea.
Debt consolidation could be helpful on the savings front. These loans can sometimes offer lower interest rates, while simplifying your repayments into one easy figure - helping you get ahead.
MoneySmart offers an interactive personal loan calculator that enables you to compare your current loan with a potential new loan.
Track your spending
So, you've made the most beautiful budget spreadsheet ever - colour-coded with epic formulas - and you know how much you can spend. But how do you protect yourself from a budget blow-out? There's a bunch of apps out there, some more complicated than others. Here're some names of simple and easy-to-use apps: ASIC's TrackMySPEND, Mint, and Wally.
Get financial advice
If making your own budget seems far out of reach, or if you just can't get your head around some of the more technical aspects of your repayments, remember this: you are not alone. Seek sound financial advice either in person or online. The Australian Government's MoneySmart website, a part of the Australian Securities & Investment Commission, is a great place to start your road to repayment recovery.