Okay I'm hoping you have put a few wrong amounts or frequency of payments in the budget otherwise the picture isn't looking too good for you right now.
Go back and double check your figures and frequencies and then hit calculate again. If you are sure they are correct then you need to act now and not delay.
It is vital you speak to your advisor or finance professional in regard to how you can minimize / reduce or restructure your debt repayments. This should be done as soon as possible before you start missing payments and your credit rating becomes affected.
Your goal should be to reduce the amount of your income that is required for servicing debts by whatever means you have available to you. Act now!!
A couple of points worth considering
Check out consolidation of loans to reduce your repayment amount, this will reduce the pressure on your finances and then with a structured plan you can start to put money aside and build up some savings for anything unexpected.
Consider a second income stream as an option for a period to help you get rid of some of your debts. Once you have repaid one or two of the smaller debts you may find yourself in a better position and no longer need the extra income.
Is taking on a boarder for a 2 or 3-month period an option to clear completely a loan commitment.
Registering at this level on the debt scale is an indicator of real financial pressure being not too far away (if it isn’t present already).
At this level the ability to save is in most cases non-existent and without the ability to save regularly your only option for any unexpected costs will be more debt.
Correcting this needs immediate attention to lowering your debt commitments.
A couple of points to review
Do you have a budget and are you actively monitoring your expenses to see where you might be able to save costs?
Another option is to consider cashing up of assets to reduce your commitments. Now is a really good time for you to be seeking professional advice and creating a plan forward.
It you don’t have a budget talk to a budget advisor or book a Discovery call with myself to discuss a strategy or plan. You don’t have to do this on your own.
I'm thinking right now life financially seems a little pressured.
There is a high likelihood that save regularly just isn’t happening right now too.
Your priority should be to consider how you can increase your income or alternatively reduce debt levels.
A couple of points to review
If you’re concerned right now, contemplating how bills will get paid or what you can hold off paying then you have most likely been here for a while. It’s time to revisit your budget (or get one in place). A solid plan is what will help you from sliding further into an unmanageable situation.
Do you have a number of short term debts you could consolidating into one loan? This will bring your mandatory payments down and give you room to breath while you establish a workable budget.
Are there things laying around the house you never use - things you can turn into cash and clear some smaller debts with?
Is there an opportunity to earn some extra income? Extra hours at work or a part time job?
Book a Consultation if it feels too hard to figure out. Yes, it costs but if you don’t invest in yourself and getting back on track the consequences can be tough.
Okay so I am guessing as much as you want to save regularly this just isn’t happening.
Or if it does it isn’t too long before it disappears again
You are on that tipping point of what I refer to as the ‘Money Seesaw’ and it is important you don’t tip over the wrong way.
Something worth considering
There are two sides to the money seesaw, ‘Debts’ and ‘Savings’. Do you have any current debt commitments that you are applying extra payments to in order to pay off faster?
You may be better to reduce back to the required payment and put the extra money into building up some savings at this point in time.
Remember it is having savings that will protect you from getting further into debt - regular savings is an important building block of any budget.
You can always make additional payments from your savings later towards your debts.
B isn’t a bad place to be (excuse the pun)
It does mean however that saving regularly is likely to be hit and miss. Some weeks you can and others you can’t.
The great news is it’s unlikely you will be going backwards
There is a risk however that any savings you do have are likely to be needed from time to time for fixed living costs or unexpected expenses.
A couple of points to review
Savings protect you from getting further into debt - regular savings is an important building block of any budget/plan so even if it’s only $10 a week aim to make saving a consistency.
Until you are confident of your budget/plan and are saving regularly you may want to defer any decision to take on further debts no matter how confident you might feel that the additional repayments could be maintained.
If you’re currently servicing a hire purchase/loan and its nearing completion, stop and think carefully about whether you really want to replace it with another one.
A better solution right now might be to increase your savings capacity to provide greater certainty of self-funding future unexpected expenses.
Hey not bad, you shouldn’t be feeling too much stress at the moment, bills will be getting paid and savings regular but perhaps not at the level you would like them to be.
If you are not saving regularly we recommend you go back through your budget and have another look at your expenses to see whether some changes can be made to improve your ability to contribute to regular savings.
A couple of points to review
Plan ahead for purchases rather than jump into 'Interest Free' or 'Repayment options' wherever possible.
It doesn't take much to push you further up the scale so planning ahead means you are less reliant on debt funding those wants.
Remember the further you go into debt the harder it is to save and you can spiral out of control very quickly.
Can you use some of your savings to fully repay any smaller debts?
Doing this removes them from your budget giving you a greater capacity to save and may improve your position by moving you from BT to T.
Hey there well done
Your current debt levels are comfortable for the level of income you receive.
A couple of points to review
You should be enjoying regular growth to your savings if you are in this category. The key is to stay here if at all possible.
If you aren’t regularly saving then this should be your focus. Go back to your budget and make some adjustments so savings can start happening.
Building savings into your budget/plan is what will help protect you from sliding up the debt scale through additional borrowing in the future.
Are you considering buying your first home or taking on more debt?
Before you do add the additional payment requirements to the amount you are already paying for your current debt commitments then recalculate.
What does this look like for you now? Are you comfortable with what taking on this additional debt will look like?
If not but you still feel the need to borrow it is important to seek some advice to create a strategy that can help you maintain control while the additional debt level is present.