Want to become a debt expert? Keep reading!
While the word debt carries a negative stigma, it’s not an uncommon problem. Broadly, it is a sum of money that is owed to another party, being the creditor. It is your responsibility as the debtor, to pay that money back.
If you are struggling to gain control of your financial situation you can get help from a financial advisor. This is a service provided by a licensed advisor to help you with budgeting, superannuation, retirement planning, insurance and investing.
What can a financial advisor do for me?
- Set short and long-term goals based on your income and debts.
- Better manage your money.
- Come up with strategies to achieve your financial goals.
- Help you decide where to invest your money.
Of course, there are costs involved if you decide to work with a financial counsellor. While this a great service, it’s not the solution for everyone. There are free alternative tools available online to help you manage your money.
For more information of getting financial advice, click here.
How to avoid debt
Debt is often a problem that creeps up on us, but there are tactics that will help you avoid getting into financial troubles;
- Have savings. One of the main reasons people get into credit debt is because an unexpected payment comes up, such as, a medical or car expense. If you don’t have savings, you most likely to pay the bill via credit. By having an emergency savings account this problem can be easily avoided.
- Set a spending cap: Don’t have a spending cap for more than you can afford. This could trick you into thinking you have the money to spend, when in reality you don’t.
Pay your credit card balance in full each month, this will prevent you from ever getting into credit card debt.
- Try your best to stay employed in a reliable job.
- Consider looking at used cars or paying cash rather than opening a payment contract.
- Before taking out a home mortgage, make sure your income covers the repayments as well as a contribution to savings.