6 ways to stay on top of interest and loan repayments
You don’t need a new year to refresh your financial mindset. Any time is a good time to reflect on your finances and set some goals for yourself and your family. It’s also a great way to look at the bigger picture when you may be feeling some financial stress.
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 simplify your repayments by requiring one monthly payment, rather than multiple. Now that sounds easier to manage!
MoneySmart offers an interactive personal loan calculator that enables you to compare your current loan with a potential new loan, alongside some helpful info if you’re considering a debt consolidation 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 are some names of simple and easy-to-use apps: Good Budget, which uses the envelope method to categorise your budget and spending, Mint, and MoneyBrilliant.
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.