How to manage debt

In challenging or encouraging economic times, understanding how to manage debt is important for your financial health. 

Managing and reducing debt


Understanding how to manage debt is important for your financial health. And sometimes it can be overwhelming. If you’re feeling that way, remember, you’re not alone. There are many solutions that can help make debt manageable. But just as it takes time to get into debt, it can also take time to get out of it.


  • Create a budget and stick to it. Budgets can help you gain control of your debt and manage future spending.
  • Prioritise your outstanding balances based on interest rate. Pay off your highest-interest debts first. But remember to continue paying at least the minimum amount on the other outstanding balances.
  • Consider consolidating outstanding balances into one convenient payment. You might also be able to consolidate balances to a lower interest rate, and save on interest payments.
  • Talk to your lenders if you’re struggling to make your payments. Don’t skip the payment altogether, as this will only make the situation worse and impact your Credit rating. In many cases, lenders are willing to work out a solution with you.


  • Seek advice from a professional Credit counsellor.


How to budget


After downloading the Budget Worksheet, follow these steps to prepare your budget: 


1. Track your income and expenses:


Over a two-month period, keep records of all your money coming in (income) and going out (expenses).


Certain expenses may be fixed each month, including rent, mortgage, groceries, insurance premiums, utilities and transport.


Other expenses may vary – such as vacations, entertainment and gifts.


2. Create your budget


Use the information you gathered above to help you complete the fields on the Budget Worksheet.


It is recommended that you prepare the budget for one month so you can directly compare your monthly expenses against your income.


You may also choose to complete your budget from a household point of view. If this is the case, be sure to consider income from all contributing household members and the total of everyone’s monthly expenses.


3. Follow your budget and keep track of your spending


When you have a good record of where your money is going, see if you can cut costs in certain areas. Or, see if you can add to your savings.



Budget worksheet


Budgets can help you recognise spending habits and identify areas where you might be able to cut back. They’re an important tool for managing your debt, and are simple to create.


Download a budget worksheet









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Our simple Credit and Charge Card Guides are a great place to start.

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