5 Tips For Reducing Your Debt

In our experience with helping first home buyers to get into their first home we know that often an initial hurdle is getting rid of debt.

Having a plan to tackle this debt has two positive outcomes; firstly reduced debt gives you a better position when it comes to arranging home loan pre-approval; and secondly once the debt is paid off it frees up income to be put towards your deposit.

Here are our 5 tips for reducing your outstanding debts and getting you on the path to home ownership.

1. Make A Budget

Making a budget will give the full story of your incomings and outgoings letting you know if you have money left over to put towards debt repayments.

Sorted.org has an excellent budget creating tool that will let you know how you’re tracking.

If you find that your outgoings are more than your income then you need to look at the next tip.

Photo by GotCredit

2. Get Rid Of Non-Essential Expenses

If your goal is getting into your first home then potentially some sacrifices may have to be made to get you there quicker.  Do you need that extra pair of shoes or that TV subscription?  If it means having more to put towards your deposit then some sacrifices for a period of time is surely worth it.

2. Consolidate Your Debts

Have you got an hire-purchase agreement, credit card debt and other loans that are got unbearable interest rates?  A debt consolidation can wrap all your debts into one manageable loan with a repayment plan tailored to suit.

Once you’ve got these debts out of the way you can then continue putting the regular payments towards your deposit.

Get in touch with us today to see how we can help consolidate your debts.

4. Setup An Automatic Payment

The easiest way to avoid spending money that could go on reducing your debts is to setup an automatic payment that ensures regular payments are made.   Have a look at the budget you have created and determine a regular payment you can afford, even a small payments will help.  An automatic payment removes any way of coming up with excuses for not making debts payments.

5. Get Rid Of Credit Cards

Avoiding getting further into debt is at least a step in the right direction.  One way to do this is to remove the temptation of credit cards getting you further into debt.  If you’re simply paying the monthly minimum payment requested on your statement, try to increase this to save you on interest costs and get yourself debt free quicker.

Looking to get rid of your debts?  Get in touch with us to see how we can help you.

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