Debt Management

Debt management is the process of investigating one’s current financial position, taking into account personal, investment, and income circumstances, to identify good and bad debt. A debt management plan, using effective strategies is then formulated and set in motion to turn bad debt and into good debt, which in turn, aids wealth accumulation.

The question everyone wants to know is, how do I pay off my debt quicker? Well, it is easy, but you have to be motivated and be prepared to change your spending habits. The only way to pay off debt quicker is to assign funds from elsewhere onto your debt. This may mean only eating out once a week, or not at all. Other surefire ways to pay off debt quicker include

• stop using your credit cards – if you can’t afford it, don’t buy it. You will never pay off debt if you keep accumulating debt.
• Call the bank and ask them to reduce your credit limit – you can’t spend it if you don’t have it.
• Keep track of your spending – give yourself a spending limit, and don’t surpass it.
• Meet your monthly payment requirements on time to avoid additional interest.
• Pay more than the minimum payment each month.
• Meet with a debt manager at Centaur Financial Services

Yes! Of course, but our Gold Coast debt managers can only do so much. Having a plan in place is one thing. Following the plan is another. Just like a dog trainer; they can show you how to train your dog for better behaviour, but if you don’t uphold your end of responsibilities and continue to implement change, then they will go back to their old behaviour.

It’s up to you to continue actioning the advice and recommendations of your debt management plan for change to take place. Fail to do so, and you will go back to accumulating more bad debt, and your goals will continue to be further and further out of reach.

The is some degree of financial risk in all forms of debt; whether it’s a mortgage, credit card, personal loan or otherwise.

Financial risk categories include liquidity risk, funding risk, interest rate risk, foreign exchange risk, commodity price risk, and business or operation risk. The more in debt you are, the higher the extent of risk exposure. By having a debt management plan in place, you are essentially reducing your risk exposure by meeting your payment obligations.