The cost of living in Australia has skyrocketed over the past few years, and we are all feeling the effects of it. From tapping your phone for your morning coffee, to opening your monthly electricity bill, the increases are noticeable and shocking.
Managing your finances can be challenging, especially when the bills feel neverending or you find yourself forgetting when loan payments are due. However, with the right understanding and approach, personal loans can serve as effective tools to help you regain control over your financial situation.
Understand your loan details
The first step to take is to thoroughly review your loan agreement. Read it once, read it twice, and read it once more. Look out for the important information:
- Loan amount and terms: Know how much you’ve borrowed and the length of the loan. Note your direct debit dates in your calendar so you know when to ensure funds are available for each payment, whether it’s weekly, fortnightly or month.
- Interest rates: Understand your fixed interest rate and how it affects your repayments. If you are unsure about this or need extra information, call our team today and we will work with you.
- Fees and charges: Know the additional charges associated with your loan such as penalties for missed payments and account management fees. Rapid Loans doesn’t charge early repayment fees, so you have freedom to get ahead on your loan and save on interest.
Identify areas to reduce spending
Your finances need attention and careful consideration. It’s smart to assess your current expenses and assess whether they are essential or not. These adjustments can free up funds to allocate towards your loan repayments. Here are some simple changes that can make a significant difference:
- Dining out: Opt for home-cooked meals instead of purchasing takeaway
- Transport: Consider getting public transport to work instead of driving. This will help save money on fuel and parking costs.
- Subscriptions: Review and cancel any unused or unnecessary subscriptions.
Create and adhere to a budget
Creating a budget is a great way to optimise your finances. It helps you develop a clear and realistic picture of your financial position, highlighting how much you need to spend, and where your money is going. It might sound boring and tedious, but it’s the best way to completely understand how money flows and your financial position.
- Track income and expenses: document all sources of income and monthly expenses. This is the foundation of your money going in and out.
- Set spending limits: assign specific amounts for categories like groceries, utilities, and entertainment.
- Monitor progress: regularly review your budget to ensure adherence and adjust as needed.
Pay with cash
Paying with cash can enhance your awareness of spending habits. This may not sound significant, but cash is a lot harder to part with rather than just tapping your card. When you physically hand over money, you’re more likely to consider the necessity of the purchase. This exercise might combat impulse buying and keep you within your budget.
Write a shopping list
Making a shopping list before you leave the house can ensure you don’t put anything unnecessary in your shopping trolley. This simple technique helps prevent impulse purchases, saves money, and reduces waste.
Managing your finances and personal loan can feel difficult and overwhelming, but it doesn’t have to be. By implementing these small strategies, you can effectively manage your personal loan and improve your overall financial health. Remember, small consistent changes can lead to substantial long-term habits and benefits.
This article is intended as opinion only, and not as a sole source of guidance. It does not take into account your individual circumstances.