The following are ĠEMMA tips directed to help you to get your debt under control.
This is the first step – taking stock. Put together a clear picture of your debts as well as (a) the minimum monthly repayment obligations. Include credit cards, loan repayments, unpaid bills, fines and any other money you owe. Then add up all the debts to see how much you owe in total. The state of play may be such that it may be awful. Do remind yourself that you’re taking charge of your money. And that’s a good thing.
The next step is to determine how much you can afford to pay the monthly payments you are obliged to meet every month. The best way to do this is to draw up a budget. We suggest that you download the My ĠEMMA Budget planner to help you put this together. Input in the My ĠEMMA Budget Planner all the money you have coming in each month (income), such as salary or benefits. Then list all the money going out (debts and expenses), for things like food, rent or mortgage, credit cards, electricity, phone and transport.
Add these up, then compare money in and money out.
If you have more money going out than coming in — well – it time that you make the right choices. Pin down on these two important matters:
- ‘Needs’ (can’t do without)
- ‘Wants’ you could do without, at least until such time that you have control over your debt.
Identify some expenses that you can cut or reduce. Be realistic — don’t make it impossible to stick to. See living on a reduced income for ways to reduce your spending.
My ĠEMMA Budget Planner
Track your spending by making use of My ĠEMMA Budget Planner tool which is easily accessible. This tool enables you to list your expenses against your income to achieve your financial goals.
You need to determine how best to manage your debts. If your household finances are not stretched and you are meeting your montly re-payments and still have some cash – then start paying off that debt with the highest interest. We suggest that you read next Tuesday’s post which is titled ‘Paying off your debt’.
If you are struggling in meeting you ‘needs’ expenses and paying off your debts we are ĠEMMA strongly recommend you focus on your priority debts and try to pay them first if you can. Priority debts include:
- Mortgage payments.
If you have a mortgage and you are struggling to make the re-payments, occasionally missing out or falling behind a monthly payment we at ĠEMMA advise that you meet with your bank and explain your situation to them and discuss with them a new mortgage repayment plan if that’s possible.