According to a recent report, Australians hold the greatest amount of household debt than any other country in the entire world. Household debt averages around 130 per cent of the national GDP, leaving borrowers at high risk should another economic downturn take place in the near future. The rising amount of debt in recent years is attributed to a number of factors, including the pressure to buy personal real estate at an early age as well as common misconceptions relating to the management of finances and repayment of debt over time. For many households, it is clear that better money management is necessary to reduce the level of financial exposure that debt creates.

Money management guideline

Money management comes in a variety of forms, but for those struggling to keep up with debt obligations each month, creating a plan is the best place to start. Individuals can begin by budgeting out what they can afford each month based on their required living expenses and repayment on debts owed. It is important to be realistic when going through this process, and to employ the help of a professional budget planning expert or a financial expert if you are finding it difficult to create a plan on your own.

Once you have determined how much you can afford, it is beneficial to contact your creditors that you are either unable to pay the amount regularly or that you might have late payments in the near future. Creditors are often willing to work with borrowers to establish repayment plans when financial hardship arises, but the process is much easier on both parties when it is started early. Make sure to take notes on the terms of the new repayment agreement if one is offered, and be willing to sacrifice other monthly spending if necessary.

If you are concerned that you are beyond fixing your money management issues alone, it may be necessary to contact a professional in the field of debt negotiation. There are experts all over Australia that have the required understanding of financial hardship that is necessary in creating a smart money management plan. These professionals can help you develop your repayment plan based on your monthly budget, and can negotiate your new agreement with creditors directly. They are also able to assist you with understanding your options surrounding debt agreements as an alternative to bankruptcy.

If you have found yourself in a place where you are unable to manage your debt obligations each month, use these steps to get back on track. Analysing your budget, developing a plan and working directly with a debt solutions provider may be just what you need to get your financial standing in order.