Get out of debt and back in control of your finances with our simple money tips.
If your debt is on a credit card, work out how much extra you can put towards your card and crunch the numbers using our credit card calculator. You will be surprised how fast you can pay it off with small extra repayments over a year, and how much interest you will save.
Work out how you can pay off your card faster.
Use our credit card calculator
To work out how much you can afford to put towards your debts create a budget using our budget planner. Once you put in all your expenses, see if you can cut back on any unnecessary spending so you can have even more to put towards your debts.
See if you can find some savings.
If you need help staying on track and managing your day-to-day spending, try using our TrackMySpend app.
Keep track of cash.
Work out how much time and money you’ll save by making higher repayments on your credit card using our credit card calculator.
If you have more than one credit card to pay off, pay the card with the highest interest rate first. Remember to continue paying at least the minimum amount on the other outstanding balances too.
Take a look at our page on how to pay off multiple cards credit cards for more tips.
Avoid unnecessary late payments by asking your credit provider to send you SMS or email alerts just before your repayments are due. You can usually set these up online.
You don’t want to add fees to your already high debt bill.
Kate went travelling for 6 months to Europe and South America. She took $18,000 of savings with her to pay for the trip plus she had already prepaid some flights and tours.
She had an amazing time overseas and did some things that she had been dreaming about for years. She went to some music festivals, hiked in the Pyrenees and even did a surf camp in Portugal.
When she had been away for 5 months Kate started to run out of money. So she had a choice. She could either go home a month early or start paying for the rest of her trip with her credit card. By the time she came home, Kate had around $10,000 of travel debt on her card.
She quickly got a new job and made a plan to clear the debt. First she did a budget to see how much money she had left after paying her expenses each fortnight. She then used MoneySmart’s credit card calculator to work out how much her monthly repayments would be if she were to pay the debt off over 8 months. They worked out to be $1,250 per month.
It took a strict routine of bringing lunches in to work, not buying any clothes and staying in rather than going out, but Kate managed to clear all of her travel debt in 8 months.
If you’re struggling to make your repayments, don’t just stop making them. This will only prolong the debt pain and will affect your
You can also speak to a free financial counsellor if you are struggling with your debts.
Prevention is better than cure. If you follow these holiday savings tips you can avoid debt on your next trip.
Work out how much money you need for the holiday and how long it will take you to save that amount. See our saving for a holiday webpage for more details. Paying for your trip with savings rather than credit makes a lot of sense.
Saving early means you can book early too. You can enjoy early-bird discounts by booking your flights and accommodation months in advance.
Don’t follow the crowds. Avoid the peak season. Be a non-conformist and head to the mountains and lakes when everyone else is flocking to the islands and beaches. If you can travel in winter and avoid festive and school holiday periods, you’re off to a great start.
If you’re going overseas, check the transaction fees your bank will charge you on your debit or credit cards before you go. You could be charged a foreign currency conversion fee, an overseas transaction charge or an additional cash advance fee (for credit cards).
Carefully research and compare your options well before you go. Find out more about prepaid cards you can use while travelling overseas.
Our Australians and travel insurance infographic explains why Australians travel, where they go, what is covered and isn’t covered by travel insurance and how to get the best policy for you.
Avoid debt lag by setting yourself a spending limit and paying for your trip with savings.
Please contact us on |PHONE| we can help you work out your combined financial goals, budget better and develop a plan to help you grow your wealth so that you can achieve your goals.
Reproduced with the permission of ASIC’s MoneySmart Team. This article was originally published at https://www.moneysmart.gov.au/managing-your-money/managing-debts/how-to-get-out-of-travel-debt
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