Staying in control of your finances

Idea #1: Set a budget

Get started by downloading your handy GE Money Budget Planner here.

It can take some time to work out a proper budget, but it will be well worth the effort. This exercise will give you a more accurate overview of how much you’re spending each month, and also help you differentiate between the things you need (essentials such as housing and food) versus things you want (things you would like to have, but aren’t essential).

Try to include once-off items you expect to pay for, such as your car registration or home insurance. Including these in your budget means you will be saving for it, rather than being hit with one big bill that you may not have additional cash to pay for (and may have to put on your credit card).

When you need to trim your budget, cut back on the ‘wants’ first. But don’t be overly restrictive; include some allowance for spending on entertainment and social events so you can still enjoy yourself.

Idea #2: Use your credit card sparingly

A debt consolidation loan has a fixed loan term and repayment amount – so at the end of the loan term, your debt will be totally repaid. On the other hand, if you only make the minimum monthly repayment on your credit card, it could take years to pay off and you would be paying interest all that time.

So if you still have some credit cards, consider closing them. Making credit less accessible gives you time to think about whether you really need something before you buy it.

Idea #3: Consider a loan instead of your credit card

There may be situations where you need quick access to a larger amount of funds that you do not have right now – for example if your car breaks down and you need to repair it, or if you have a plumbing emergency in your bathroom.

While you could put these charges on your credit card, a personal loan is often a smarter option for one-off purchases like these because:

• The interest rate on a personal loan could be less than the rate on your credit card.
• If you only make the minimum monthly repayment on your credit card, it can take years to pay off and you’ll be paying interest all that time.

Idea #4: Make your savings work

If you have some money saved in the bank, check what rate it is earning – simply shopping around for the best interest rates can earn you some extra cash each month.

If you are being charged more interest on your debts than you are earning after tax on your savings (and you almost certainly will be), use some of your extra savings to pay off your debt instead. Start with the debt that charges the highest interest rate first; and always remember to leave enough funds available for emergencies.

Idea #5: Overpay your loan

By making extra repayments on your personal loan or home loan, you could save on interest and significantly cut down the length of your loan. With a GE Money Debt Consolidation Loan, you can make additional repayments at any time without being charged a fee^.

So repay a little more each month if you can afford it; or if you come into some extra money (such as your tax return or a bonus at work), consider putting some of it towards your loan repayments.

Idea #6: Keep an eye out for opportunities

Living on a budget doesn’t mean you can’t have fun! Look around for cheaper alternatives to what you enjoy doing – such as taking advantage of discount days at things such as the cinemas, or having a picnic at the park instead of going to a restaurant – and you won’t feel deprived.

If you’ve got a bit of an entrepreneurial streak in you, think about using what you have to earn some extra cash so you can do the things you want to do. Here are some ideas to consider:

• Hold a garage sale to sell your unwanted clothes and furniture
• Rent out a room in your home, or one of your car spaces
• If you're good with handmade crafts, sell your work at your local farmer's market, craft fair or street fair
• If you like animals, consider walking dogs or pet sitting for your neighbours

Stay in control

Once you've made the decision to take control of your debt, stay disciplined about how you use your money. By monitoring your spending and being smart about how you use credit, you’ll be right on track to becoming free of debt.