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  2. 5 Ways To Reduce Debt in 2016

 

 

Make 2016 the year you take charge of reducing debt! Depending on your situation, there are several ways to tackle this.


1. Get honest about your debt. Know what you have, with whom, and how much interest you're paying is a great starting point. Check out this fantastic free Debt Calculator from Sorted.


2. Review Home Mortgage

With interest rates at an-all time low it’s a good idea to review your home mortgage. Restructuring or switching lenders could save you thousands of dollars over the long term. Wealth Works Mortgage Broker, Kim Gallie notes that “even though you may be charged an early repayment fee, the interest you’ll save in the long run might make it worthwhile. Plus, the new lender might offer you incentives like waiving the application fee or paying your legal fees”. Before making any big decisions, we highly recommend that you consult a mortgage broker.


3. Compare Your Options. Take the time to review your costs and see if there are better options available. Not only your home mortgage but your insurances, credit cards, memberships, subscriptions and utilities. You could save hundreds each year by simply switching power companies. Check out Power Switch to see how your current electricity provider compares. Any money you save in these areas can go toward further reductions.


4. Reduce Credit Card Debt

If your debt is sitting on a high interest earning credit card, investigate transferring to a 12 month interest free card. Similarly, if you're incurring high interest with your store card, investigate paying off the balance using a card with a lower rate. Interest.co.nz provides a credit and store card comparision report which is a helpful start. There are over forty different options which can be overwhelming. On the flip side it means that it’s a consumers market, so take the time to shop around. Compare monthly fees and benefits to make sure that you’re getting the best deal!



5. Consolidate Debt

If you’ve got so many balls in the air that you feel like you're juggling, it might be a good idea to look into debt consolidation. It’s no quick fix but many people find that simply focusing on one loan removes a lot of the stress. It’s also a good opportunity to knock those high interest earning hire purchases on the head and get rid of credit cards. Before you make any decisions give your bank or an authorised financial planner a call to discuss the best option for you.  


*Remember to read all Terms and Conditions before making any decision or better yet, consult an authorised financial adviser. Watch for things like transfer fees, high interest rates post interest free periods. If it sounds too good to be true then it probably is!


Are you on the road to financial freedom? Talk to the fully qualified and authorised team at Wealth Works. You’ll receive expert advice on how you can reach your financial goals. It’s just one way we can help Kiwi’s realise their dreams. Get in touch today to book your free initial consultation.



 
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