What is a Debt Hangover?
With Australia now sitting at an all-time household debt high of over $1 trillion, it’s no surprise that the FCA (Financial Counselling Australia) headlined mortgage stress as a top contributor to Australia’s “debt hangover”.
The CEO of FCA went on to express that 30% of Australian households are facing some sort of financial stress with 20% that are “really struggling” to keep their head above water.
Household debt paired with rising interest and unemployment rates could be devastating to both individuals and families if precaution and control is not placed on finances. Thus, it’s already no surprise that the National Debt Helpline says that “14,000 callers were unable to speak to a counselor in January 2017 because of a lack of staff”.
If you’re going through a debt hangover yourself, here are some tips:
- Control your Budget – Keeping track of your expenses and limiting unnecessary expenditure could result in being able to pay off your debt faster. Spending less and saving more is often easier said than done but apps like TrackMySPEND, Pocketbook, Expensify and Splitwise may help keep you on track.
- Find Ways to Earn More – Getting a second job or finding a higher-paying job is a good option if you’re looking to pay off high mortgages with high interest rates quickly. However, remember to budget all this extra money solely for your debt reduction as it becomes easy to immediately increase unnecessary expenditure with any pay rise.
- Refinance your Mortgage – In most situations, refinancing your mortgage can enable you to reduce debt payments and save money through lower interest rates. If you have multiple debt streams, the process of streamlining debt into one home loan can enable you to reduce the amount of interest you pay on multiple debts.
- Keep up with Constant Loan Repayments – As simple as it sounds, keeping up with constant loan repayments prevents you from falling deeper into debt with a build-up on interest. Furthermore, setting up a higher weekly/monthly repayment will see your debt decreasing at a faster rate while also decreasing your overall mortgage sum in the long run.
- Seek Professional Help – If you’re struggling with household or mortgage debt don’t be shy to seek professional help. Debt Fix is one the most reliable debt relief providers in Australia. Our experience in helping countless Australian households allow us to come up with tailored plans for each individual case, which results in people regaining the financial control in their life. Should you need any help, please don't hesitate to contact our specialists on 1300 332 834.