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Generation Y - Is debt ruling your life?

Student debts, credit cards and personal loans are no doubt stressing you out and most likely preventing you from enjoying other things in life!

Solution – with the right advice, work hard now to clear your debts and start creating your future. You’ll be able to enjoy your life much sooner than you think.

Here are some tips to help you get out of debt sooner.

Plan your budget

To achieve your goal of being debt free doesn’t have to be that daunting, a good way to start is with your budgeting. Try to keep a diary for your expenses and your spending. This will enable you to calculate where your money is going and how much spare cash you can use to attack your debt.

Pay extra

Try paying more than the minimum off your debts. Whether it’s personal loans or credit cards, paying the minimum will hardly make a dent as you will only be paying off the interest.

Prioritise

Prioritise all your debts by the interest rate you are paying. Try to get the balance down on high interest debts first, as paying these off first will save you a bit more money. The money you save in interest, you can then use to pay off you lower priority debts. This will get you to your debt free goal that little bit faster.

Consolidate

Consolidate all your higher interest debts into one lower interest debt. This could be in the form of a low interest rate credit card or a personal loan. This strategy will also reduce your interest repayments.

Ensure you have the right card

There is no need for anyone to be paying as high as 20 per cent interest on their credit cards. Due to the increased level of competition in the credit card space, many lenders are offering much lower interest rates and deals.

When doing your research, make sure you read the fine print, as cards offering low or zero interest rates on balance transfers, do so for a limited time only whereas other cards might offer a low interest rate for the life of the transfer.

Become card free

Once you have selected a low interest rate card to transfer your balance, make sure you don’t use that card for any new purchases until you have paid off the full amount from the initial transfer. The best way to do that is the old fashioned way – cut your card up and throw it away!

Make the first step

If you’re having difficulties repaying your debt, make the first step and speak to your lender. Being open and honest about your financial difficulties with your lender, you will probably find they are open to review your repayments and look at other solutions to help you out.

Speak to a professional

If you feel that you are in over your head and struggling with your finances, speak to a Bridges financial planner for help with a financial strategy that can get you back on track.

To find out more about the financial issues that affect your generation, Bridges have created a ‘Taking care of MY generation’ guide. Logon to www.bridges.com.au to view an eGuide or call Summerland Credit Union to order a printed copy.

For more information on Bridges’ services or to arrange a complimentary, obligation-free initial consultation with a Bridges financial planner near you, please call Summerland Credit Union on 1300 802 222 and start making the most of your money now.