You have a good job, you make great money, and you’re wondering where all your money has gone. It’s so frustrating because no matter how much you make, your bank account never seems to have more than a few hundred dollars by the end of the pay week.

If you are in this position, do you know that it’s all in how you manage your money? 

Before the pandemic hit in March, household debt had been at an all-time high, mostly due to the size of mortgage required to buy a home on the east coast.

However, it would seem that the longer the pandemic hangs around, the more financially sensible Australian’s become. There have been reports that household debt levels have improved since the pandemic with Australian’s choosing to save rather than splurge.  

Regardless of the situation, currently, household debt levels are still high. And if you were struggling financially before the pandemic hit, I hope at the very least the pandemic has you having a closer look at your finances.

Getting out of debt is hard work and takes commitment and motivation. The basic formula for getting out of debt is to change your habits. When you change your habits, you change your life. You deserve to live your best life.

Suggested steps to get out of debt as quickly as possible:

1. STOP using your credit cards mindlessly. 

Credit cards are the fastest way to accumulate debt. Behaviourally, it is so much easier to pay with plastic and not tracking your expenses. Put the cards away and start tracking your expenses using a budget planner. When you see where you are spending money you will see how quickly those expenses add up.  

2. Do NOT ignore the situation. 

This problem will not go away on its own, and the quicker you deal with it, the quicker the solution. You will need to add up all your debt, list the debt that has a higher interest rate, and start paying it off first.

3. Get your finances in order. 

You need to track the income that comes in and the expenses going out each month, and if you have a mortgage, review it now. For most, home loan would be the biggest debt we’ll ever hold personally and by a simply act of refinancing to a better loan, you will save thousands over the life of that loan.

Check how your home loan compares

4. Look for ways to earn extra money quickly. 

Have a look around your house. Is there anything you are no longer using that you can sell? This is often an easy way for us to make extra money quickly. If you have some spare time are you willing to work to make some extra money? Think of jobs you can do to bring that extra money in.

5. Explore your inner feelings. 

You need to look within yourself and figure out how you got into debt. Was it a setback such as a divorce or an unforeseen job loss? Overspending? When you identify the reason why you ended up in debt it is easier to work on and resolve your money issues.

6. Take back your control. 

The road to debt recovery is not an easy one, and at times can feel very lonely. You will find comfort in reaching out to loved ones for support and encouragement. Additional support can be found online as well. 

There are plenty of communities on social media platforms where you can join like-minded people in the journey of becoming debt-free.   

There is a lot of joy in financial freedom!

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This article via forbes does not constitute advice; readers should seek independent and personalised counsel from a trusted adviser that specialises in property, a tax accountant and property design specialist.