Don't give up if you are having trouble
managing your debts
5 GOLDEN RULES FOR MANAGING
1. Tally up your debts
List all of your debts so you know where you
Before you can start tackling your debts, you need to have a
clear picture of how much you owe in total, and what each debt
Start now and review your overall financial position.
Asset stocktake calculator
2. Get urgent help if you
Free help is available if you need
If your debts are out of control or you are really struggling to
make ends meet, it's important to act quickly. Here are some places
you can go for free help and guidance.
counselling - A free service offered by community
organisations, community legal centres and some government agencies
that can help you solve your money problems.
- Free legal advice - If you
are in debt and have legal problems, community legal centres and
Legal Aid agencies offer free legal advice in every state and
- Urgent money help -
If you are in financial crisis there are services that can help
Our section on trouble with debt has tips on how to
approach your credit provider to ask for hardship assistance.
3. Set a budget
Make your budget realistic. If it isn't, you
won't stick to it.
Setting up a budget is the only way to make stay on top of your
finances by making sure your money goes where you want it to. It's
not about depriving yourself - it's about being in
Our budget planner is a great way to start being in control of
Once your budget is set, you'll see how much money you have left
over. Work out how much of this you can afford to put towards
extra repayments to clear your debts. If you're not happy with how
much is left over, check your budget to see whether there are some
areas where you can cut back on spending.
4. Prioritise your debts
Continue to pay at least the minimum
repayment on all your debts.
With a clear idea of how much you owe on each debt, and how much
money you can set aside as extra repayments, you need to work out
which debts you're going to pay off first. Depending on how much
and what type of debt you have, there could be a couple of options
open to you.
You could start by:
- paying off the debt with the highest interest rate first;
- paying off the smallest debt first (so you feel a sense of
See making repayments for more
details on how to prioritise different types of debts.
Regardless of what you focus on first, make sure you continue to
make at least the minimum repayments on all of your debts to avoid
any late payment or default fees.
Make it automatic
A great way to stick to your plan of paying off each debt is to
set up an automatic payment from your bank account. Arrange for
your extra repayments to go directly to your loan or credit card
each time you are paid. This way, you won't forget to make the
extra payments, or be tempted to skip it.
Then, as you pay off each debt, cancel that automatic payment
and create a new one to transfer the extra money to the debt that
is your next highest priority. Remember to continue making the
monthly repayment on each debt at the same time.
Close each account as your debt is paid off
If you are paying off credit cards, remember to close the
account once you've paid it off. See
how to cancel a credit card to make sure you do this
5. Consider refinancing
or debt consolidation
It may sound like a good idea to pay someone to fix your credit
problems or roll all your loans into one loan. But, before you do
this, consider if this really is the best option for you or if
there are other ways you could go, to get help for free - for
example from a financial counsellor.
Consolidating or refinancing loans can work for some people if
it means they pay less in fees and interest. For others, it may
only be a short-term fix, especially if they can't meet the
repayments on the new loan. Visit our webpage to find out more
about consolidating and
When it comes to getting on top of debt, the
most important thing is to get started. Assess your situation and
consider the options that will work best for you. If you are
struggling with debt, act quickly and seek help.
Last updated: 10 Mar 2017