Managing Debt

It's good to be able to borrow money. It can help you acquire assets - like a house, a business or an education. But debt can also be a trap. The interest you pay on debt sucks your money away from you and stops you building your net worth.

One of the easiest ways to be in control of your money is to get your debt under control. Remember, debt can be good if you buy the right thing and control it. Don't let debt control you.

Three simple rules:

1. Save to pay expenses. Think before you go into debt. Think about whether borrowing is really the best way to get what you want. Work out how much that loan will really cost you. A good guide is: borrow to invest in an asset, save to pay expenses. Use the Sorted savings calculator to work out how quickly you could save the money so you don't have to borrow it.

2. Get out of debt fast. Work out how to get out of debt as fast as possible. Click here to use the Sorted Financial Budget Calculator - to review your monthly income and expenses and calculate what you have left over, or what you need to reduce!

3. Examine your repayment Options. Always work out how different repayment levels can affect the total amount you repay on a loan and the time it takes to repay it.

If you would like to talk to an Advice Financial adviser about how to manage your debt better, simply click here to email us now.