For many people, the New Year can be a powerful motivator to make positive changes in their lives – as long as you set realistic targets that you know you can actually stick to.

Resolutions tend to focus on health and lifestyle changes, which is great, but you shouldn't miss the chance to get your finances in order too. If you're currently struggling with debt, aiming to get on course to a debt-free future by this time next year is one of the best long-term improvements you can make.

Here are three steps to lowering your debt in 2018:

Set Financial Goals

Being debt-free is never the ultimate goal, but rather a stepping stone that will help you achieve your long-term goals such as owning a house, raising a family and taking luxury holidays every year.

Zooming in on the short-term of the next 12 months, you should consider whether being debt-free is an achievable goal by year's end. If it's not, identify other stepping stones that will help you get there and closer to financial freedom.

If you have high-interest debts, aiming to pay these off first will reduce the strain on your finances considerably. If you're not able to increase your monthly income, consider whether your savings would be better spent paying off a high-interest loan rather than sitting in your bank accumulating small interest every month.

You can also speak to a financial advisor about consolidating your debts to make repayments more manageable.

Re-do Your Budget

Have your circumstances changed since you last drew up a budget? This should be reflected in this year's budget to create a financial plan that gives you as much money as possible to pay off your debts, without affecting your quality of life.

Your budget should include absolutely everything that you know you have to pay each month, including a food allowance, bill payments and interest on loans. It also needs to be flexible enough to expect the unexpected.

Many young people who are struggling with debt have found an answer in systems like the 50/20/30 rule: setting aside 50% of your take-home pay for necessities (accommodation, food, transport, etc.), 20% to pay off debts or put into savings, and 30% for luxuries. This doesn't work for everyone, but it's a good start if you've never seriously budgeted before.

Try our free budget calculator to see how far your income can stretch.

Refinance Your Debt

If you're worried that you're paying too much every month for your mortgage, car loan or other debts, you could be right. That's why you could benefit from speaking to a financial advisor about refinancing your loans with a different provider.

Through refinancing, you could find a newer loan with a lower interest rate, lower fees or a more flexible payment term. This can free up money every month that can be put to use tackling your other debts.

Get your free consultation

Find out more about refinancing and consolidating your debts by arranging a no-obligation consultation with Debt Fix. Our experts will explain exactly what's involved, so you can make a fully informed decision that's right for you.

Call us now on 1300 332 834 or contact us online.