1. Your credit card balance never shrinks
If you have multiple cards, try paying off the card with the smallest balance first, then work your way up to the highest, says Seeds of Advice financial planner Susan Bryant. Clearing one card can encourage you to stay on the right track.
2. You have a timeshare you can’t get rid of
Timeshare contracts can be difficult to get out of, with high annual fees, 99-year leases and – in some cases – no death waivers, meaning your debt will eventually be passed on to your children, Susan explains. But it’s not a lost cause.
3. You’re close to retiring but haven’t paid off the mortgage
Making extra payments while you’re still working can make a big difference to the balance that’s left when you retire, Melissa says. “Start putting in an extra $50 a week, or consider putting off retirement for a few years so you can get this figure down. But if you’re already at retirement age, you may want to consider using your super to pay off your mortgage,” she says. Another option is assessing whether you’d be better off selling up.
4. You can’t stay on top of your bills
One of the most important things you can do in this stressful situation is to smooth out your bill cycles, Melissa says. “I ask my clients to make a list of their fixed costs for the next 12 months and divide these costs by 12 monthly amounts. That way they always know how much the payments are going to be in order to be better prepared to meet them,” she explains.
5. You’re paying off your family’s debts
The solution here is as simple as saying no, insists Susan, who has noticed a growing trend whereby her clients are struggling while their children lead “champagne lifestyles”. “If you go cold turkey on subsidising their lifestyles, you’ll be doing them a favour by not only teaching them to become more resourceful, but having more of an estate to leave to them further down the track,” she says.