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Top Tips: How to get on top of debt

The tips and tricks Australians can use to take control of their debt

Australians are being urged to use the new financial year as an opportunity to get on top of their debt.

The Customer Owned Banking Association Director of Strategy Sally Mackenzie has provided five top tips for Australians looking to take greater control of their finances.

  1. Calculate all your debts so you know where you stand and how much you owe.
  2. Prioritise debt with the high interest rate first.
  3. Shop around for lower interest rates and cheaper fees to help consolidate your debt.
  4. Always pay off the minimum amount owed on all debt. If you can afford to pay more, do so.
  5. Set up automatic transfers to pay down debt

“It’s easy for debt to build up and become an issue for people. While making a budget is a good start to managing your finances, there are some other things people can do to take control of their debt.

“First of all, it’s important to know exactly how much debt you have and the interest rates for each account. Once you know how much debt you have, you can start planning a way to pay it down.

“Some people choose to pay off the smallest debt first to get a sense of achievement. This can be a good way to get motivated but paying off the account with the highest interest rate will save you money in the long run.

“It’s important to always pay off the minimum amount each month for all debt. If you can afford to pay more, you should,” said Ms Mackenzie.

Ms Mackenzie said shopping around for cheaper interest rates and lower fees was another useful way to crack down on debt.

“Shopping around for better deals on your loans can seem like a chore but it can save you a lot in the long run.

“Refinancing or consolidating your debt can help you pay less in interest and fees. A lot of Australia’s customer owned banks have very competitive rates and low fees.

“And if you are feeling really overwhelmed and struggling with your debt, talk to your financial provider. A Financial Counsellor can also help.”

Australians looking for more tips to help manage their finances are urged to visit ASIC’s MoneySmart website for more advice or ownyourbanking.com.au to find a customer owned banking institution.

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