Feeling the post Christmas debt bulge?
You are not alone.
Australians spend over $31.6 million in the month before Christmas, a figure well beyond pre pandemic spending*.
You may be looking at your festive spending and thinking, how can I reduce my costs?
Many people know that
When it comes to debt, the goal is to pay as little interest as possible.
One way to achieve this is by consolidating personal loans (e.g. credit cards, car loans or any debt with high
) into your mortgage which generally has a much lower interest rate.
By doing this you:
Keep in mind
Itās worth considering that this strategy isnāt foolproof. Whilst you are getting the benefit of simplifying the number of repayments you are making each month and paying less interest in the short term, if your payments stretch over a longer period, you may end up paying more over the lifetime of your debt.
Paying off larger amounts than your minimum repayment when you are able to can help overcome this and make sure you get the full benefit of consolidating your debt.
The real key is to maintain the same level of repayments with the new structure as you were with the old structure so you pay the principal off much faster and save big time over the long run.
Three important steps
If youāre concerned about your post Christmas debt, here are three simple steps you can take to get back on track: