Money

5 things you can do that will help you get out of debt faster

For the financially-free future you deserve.

By BTYB REST Industry Super
When it comes to getting out of debt, it can often feel as though each step forward creates two steps backwards.
Efforts to save can seem like they’re not getting you anywhere, while payment reminders continue to (literally) pile up.
And while it’s a whole lot easier to binge-watch The Crown all over again and deal with your debt later, there are changes you can make now to secure a stress-free, debt-free future.

1. Order your debt

It’s important to be realistic. Know exactly what you’re working with and write down every dollar you owe — credit cards, loans, any outstanding HECS-HELP debt and even money you’ve borrowed from friends and family. Start from your smallest debt and work your way up. You’ll be surprised by just how good it feels to have everything out in the open and down on paper.
Scary stat: As of this year, Australia’s personal debt has been reported as the highest in the world. According to the 2015 AMP.NATSEM Income and Wealth Report, the ratio of household debt to disposable income in Australia has almost tripled since 1988, rising from 64% to 185%.
The bottom line: you’re not alone.

2. Negotiate your rates

Do your homework and look around for banks advertising low interest transfer rates and, more importantly, low ongoing fees. Then call your bank and ask them how they can compete and lower your current rates. Banks need you, just as much as you need them. “Remember, it costs the bank more to acquire a new customer than it does to keep an existing one,” says Scott Pape, author of financial bestseller, The Barefoot Investor.

3. Allocate any ‘extra cash’ to paying off your debt

When those rare, but exciting, financial perks pop up unexpectedly — perhaps an annual raise, work bonus, or tax return packet — put those funds immediately toward your debt. Although it can be easy to quickly spend the cash on something for yourself, try and see paying off your debt as a present to your future-self.

4. Add to your super

Knowing how to manage your super can save (and make) you money. With your employer contributing 9.5% of your pay each pay slip, many financial advisors recommend contributing at least 12% of your salary instead. Known as a salary sacrifice, these pre-tax contributions will help grow your retirement savings, while significantly cutting your tax.
Make sure you also search for any missing superannuation you could be owed. According to the ATO, there's over $13.5 billion in lost super and some of it could be yours. Free money! Consolidating your super involves minimal effort and could bring you a handy injection of money. Best of all: super funds such as REST Industry Super do all of the legwork for you, tracking down any lost super and consolidating it into one fund so you're not paying unnecessary extra fees to multiple funds.

5. Avoid temptation

Give yourself a chance to break bad spending habits. Unsubscribe to your favourite stores’ weekly emails, remove all of your credit cards from your wallet, keep your fridge stocked-up to avoid impromptu expensive takeout. Whatever it is you find yourself enticed by, simply remove the temptation altogether. And soon, this will be you...
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