Firstly, I have been here. In my early 20’s I racked up a pretty sum on my credit card. And it felt heavvvvyy. So, know that all of this advice is from a kind, judgement free place.

Here are some things to consider:

1. How did we get here?

- This is arguably one of the hardest bits, because it involves holding the very confronting personal responsibility mirror up and looking deeply and vulnerably at the answers. For some people, this amount is due to a sudden, unplanned big cost (like a health issue, a family crisis or losing your job and living off it), for others, it's a creep over time. You use it when your day cheque runs out before payday, or you buy things when your are emotional or decide you need a holiday, and you will pay it back when you get back (the best way to induce post-holiday blues). So, I want you to think about where this debt has come from. If you need to, go back and look at the statements and rate from 0-10 how much long-term value you got from the spend. It feels rubbish but gives you the insights needed to help make different purchasing decisions in the future. I also want you to ask yourself, if you are still in the same place in 12months time, how would that feel? If the answer is AWFUL, use that as your inspo to get busting it down.

2. Babe, you need a budget.

- There is no secret to this. Its money in and out. Figure out how much you are spending on what... where you need to cut back. And separate your accounts if needed so you know exactly how you have for each category at all times (I love doing this, it's simple, effective and gives you freedom within boundaries). Firstly, we want to stop adding more to it (cut it up, freeze it, take it off your Apple pay or out of your wallet) – do whatever you need to do to create physical barriers to stop adding to it. Then make a plan on how much you can budget every month without dipping back into it and have that auto debit from your pay (or master account if you are bucketing).

3. Which strategy are you using?

- There are two different schools of thought here. Most Financial Advisers will tell you to adopt the Avalanche Method, which means prioritising the one with the highest interest rate. Interestingly though, for most of my members, I suggested the Snowball method – choose the one that is the lowest balance and start there.

This is because research suggests the motivation you get from paying one off will help you then start tackle the next smallest one. So, you decide if you want to ultimately save the most in interest (Avalanche Method) or if you know your brain will need to stay motivated and see progress to keep you on track (Snowball Method).

You also could consider a balance transfer to a lower rate card (it affects your credit rating) and if you are up a certain creek with no paddle in sight, I would HIGHLY recommend you calling your bank’s Financial Hardship team. They may be able to help reduce the interest for a period or put you on a payment plan if you are struggling.

4. Minimum payment strategies are rubbish!

- I once helped a client who had a credit card balance, I looked at the minimum repayment strategy given by the bank and was ABSOLUTELY horrified that if she only did minimums she would be in credit card debt still in retirement and have paid significantly more in interest than the actual debt amount. So, don't think minimums are going to help you. They are doing to keep you in debt.

5. Talk about money

- There is so much shame attached to debt. But if you don't tell anyone it a) feels so heavy and burdensome and b) will mean the people around you who love you may accidentally keep mucking up your budget. So, talk about it. Be honest raw and real. Say no where you need to. Ask for cheaper alternatives if your friend suggests something you can’t afford. It's not as hard as you think and just like anything, the more you do it the easier it gets.

Goodluck! Transformation is never an overnight thing. You will learn some really healthy habits and behaviours from this and think about once the debt is done, that money can be used to start working on exciting financial goals you have. Make sure you let me know how you go!

Have a money dilemma?

Money dilemmas can be a nightmare! They can leave you up all night ruminating about what to do, have you feeling alone and isolated or just plain ol' stuck. So, we are here to help. I am going to tackle one a week and give you my unbiased, no BS general thoughts on how to tackle your conundrum. We would love for you to send yours (or someone you know) in. 

Obvs all of this is general advice only... especially important to note any and all of the comments above do not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs.