Budgeting may be boring but it is one of the most powerful ways you can take control of your life and eradicate your debt.

You can find an excellent, safe & free budget planner here. But before you get started…

1: Be realistic. Don’t guestimate your costs and don’t exclude ‘the little things’.

Look at your utility bills. On the right hand side will be a ‘daily usage’ figure. Multiplying that by 14 will give you your current average fortnight’s usage and let you know how much you should be putting aside each fortnightly pay. (Don’t forget, this figure will change as the seasons do! To get a yearly average, add up all your daily usage figures from your last 6 bills, divide by 6 and then multiply by 14.)

Don’t forget: Prepaid funeral plans, Netflix, coffee or gas station snacks, church tithes, pet food/insurance, car registration, household cleaning equipment, cosmetics, lotto/scratchies, rental items, gifts and more. If you can’t think of anything else, browse your bank statement to get an idea of how many ‘one off’ purchases you tend to make.

Okay, now head on over here to fill in your budget. How’s it looking?  Probably a bit scary. That’s because most of us just don’t think of our money that way. In fact, most of the time we might even feel pretty good! It’s just sometimes when certain bills come due that we start losing sleep or leaning on the credit card.  The reality is, however, that both of those are warning signs.

That’s why budgets can be such a powerful tool. When used correctly, they can help take the blinders off help you regain control of your own life. If you have debts, it’s a great place to start to get a clear view of the battlefield ahead.


2: Winning the war on debt doesn’t have to be about deprivation – at least, not forever. Medium to long term, it’s about improving the quality of your life – but making minimum credit card/loan repayments for the next thirty years ain’t gonna get you there. So:

  1. Prioritise: Housing (rent, mortgage and rates/strata fees), Utilities (Be smart about usage and your personal tariff option) and Food (You can probably get the same or more for less – google it!).
  2. Look for the biggest and easiest cuts: These are often found in our telecommunication contracts (mobile, home phone, internet). Got to https://www.whistleout.com.au/ to compare your options. Consider month-to-month contracts so you can try out different mixes. Ask yourself if you really need to be paying home phone line rental and a mobile fee. How much internet do you use at home and outside?  How long is left on your current contract? Can you negotiate to pay out your hardware only?
  3. Know: How much money you can free up every fortnight. If you’re budgeting for your next rego bill/insurance premium – are you actually putting that money aside safely? Or is it getting spent? If the latter, consider adding it to your debt-fighting funds.
  4. Make a plan of attack for your debts. Some people prefer to attack the high-interest debts first, others to clear smaller ones for a quick victory. What about a 0% interest balance transfer card (watch for the high interest sting at the end) or a debt consolidation loan (easier to manage but may pay more in interest over the long term). If your situation is more complex, you may have other options.
  5. Know your rights: If you’re in financial hardship, you have the right to ask your creditor for a temporary variation on your loan/credit. You may request a period of time of stopped repayments so you can put more money towards clearing another debt, or a period of time of reduced repayments. Always specify what you want to happen after that hardship period, especially if interest is not stopped as well. Do you want to pay the arrears upfront? Through slightly higher payments for a little while? Or capitalise into your loan?

If you need help working out your budget or want to talk through your options in more detail, you can call Midlas on 9250 2123 to see a free Financial Counsellor. If you don’t live in the Perth Metro area, you can call 1800 007 007 to access the National Debt Helpline.