That designer handbag might give you a satisfying glow, but is one splurge too many crippling your bank account? If so you're not alone. Today, women under 25 are the fastest growing group of people struggling to repay their debts. Here's how to ensure that your cash lines your pocket, and not someone else's:
1. OWN UP
You only have to be two payments late to damage your credit ratings, and, if you don't speak to lenders early on, they're unlikely to help.
2. PRIORITIZE
You home comes first, so look at your bond rate and your pay rates, electricity and water on time so you don't accumulate interest on your debts. Shop around for the best bond rate and you'll have more cash to repay other debts. Start by paying the ones with the highest interest rates.
3. SOCIALIZE SPARINGLY
After housing, going out is our biggest money drain. Have fun at home with friends and a bottle of wine instead. Slapping your holidays on your credit card is a big no-no. Try to skip holidays for a year and save money to get out of the debt cycle.
4. FORGET INSURANCE
If you've taken out payment-protection insurance to cover your monthly payments in case of illness and unemployment, reconsider. It sounds like good idea, but there are very few cases where people are actually able to claim. Instead, put that money towards paying of your debts.
5. EASY DIY SOLUTIONS
Walk a cycle to work or start a lift club, and make your lunch. You'll be amazed about how much you save every month.
6. HAVE A CARD GUARD
Work out how much you need to get by and dedicate the rest to repaying debt. Now give your credit cards to someone you trust - a card guard- and instruct them not to give them back. Once a week, go to the bank and take out what you need for the week. This forces you to live within your means.
7. RACE TO THE BLACK
If a friend is in the same situation, compare your statements and see which of you can spend the least each month. The competitive edge is really motivating.
8. SPEED UP
The longer you have debt, the more it costs, especially bonds. Swap to your lower rates and try to overpay. A bit extra every month can cut years of your mortgage.
9. START AGAIN
Get a basic savings account with no credit facilities to stop you running up more debt. It takes ages to build up a good rating with new bank, so there's less chance that they'll give you credit, and less chance that you'll be tempted.
