Figuring out debt reduction strategies during times of financial needInvesting in property is a great way to bolster your financial health and plan for the future. If you make smart purchases and acquire assets that appreciate nicely in value, you can build a solid nest egg for yourself and your family. There’s just one question – what if you move too quickly, spend too much and begin to rack up an unmanageable debt?There’s nothing glamorous about planning your debt reduction strategy, but there are certainly times when it’s important to do so. Everyone makes mistakes sometimes, and it’s not uncommon that you find yourself in a spot where you’ve got to climb out of a financial hole as a result.
So what’s your plan? How will you get those debts under control and find yourself back on your feet? The sooner you do, the faster you can get back to accumulating property and adding to your long-term prosperity.Paying off your debts as soon as possibleIf you’ve gotten yourself in too deep with investment property and begun to take on more debt than you can handle, it might be time to reexamine your strategy and take constructive steps to get back on your feet. According to the Australian Securities and Investments Commission, you need a concrete plan to get faster about repayments. For example, do you want to pay off the smallest debt first, to gain some momentum? Alternatively, you can start with the highest interest rate first to avoid losing more money long-term.If neither strategy is good enough, it might be time to consider more drastic action such as meeting with a financial counselor who can help with things like consolidating your loans or renegotiating payment terms. Ideally, though, it won’t have to come to that. Your goal should be to get your debts under control without taking any desperate measures.Budgeting for payments, and planning aheadWhile you’d like to avoid refinancing if at all possible, you do need to do some realignment in terms of the monthly budget you’ve set out for yourself. Go back and look at your spending habits over time – what mistakes have you made that have led you to have less disposable income available than your mortgage payments demand? It’s important to rework your budget quickly and find a way to account for more debt repayments. To go even one step farther than that, Your Investment Property Mag recommends thinking about bolstering your savings as well. You never know when an unexpected expense such as auto trouble or a home maintenance issue might disrupt your savings expectations. If and when this happens, you want to have some money stashed away to help cover you through tough times. Robust savings are great for this.Get the coaching you need to succeed in the futureIf you’re just starting to dabble in the investment property market for the first time, you might not be fully prepared for the financial challenges that come with that. If that’s the case, never fear – you can get personalised wealth coaching from Think Money that’s aimed at helping you reduce debts and maximise your bottom line.When you start buying property, you’re playing a high-stakes game. The gains can be much larger; the losses can be, as well. This might be daunting, but our program ensures you will have a caring professional by your side all the while, helping you navigate all the challenges you’ll face. Sign up now for a free debt management training session with one of our dedicated specialists. You’ll be surprised at how much you learn.
How will you get your investment debts under control and find yourself back on your feet?