Flourish Health & Wellbeing eMag - Latest Edition - Flipbook - Page 63
Reduce Financial
Fragility
Two households with
the same income may
have very different
levels of resilience. The
difference often lies in
their 昀椀xed commitments.
Rent or mortgage
repayments, loan
instalments, insurance,
utilities and recurring
contracts can leave
little room to adjust
when circumstances
change. Reviewing
these costs can create
greater 昀氀exibility without
requiring constant
sacri昀椀ces in everyday life.
Consider whether
you could:
• compare energy,
phone and insurance
arrangements
• cancel memberships
and subscriptions that
no longer provide value
• review loan interest
rates and fees
• reduce credit limits that
encourage unnecessary
spending
• plan for annual
expenses through
smaller regular
transfers.
Before re昀椀nancing or
consolidating debt,
consider the total cost,
including fees, the new
interest rate and the
length of the loan. A lower
repayment can appear
helpful while increasing
the amount paid over time.
Give High Interest
Debt Priority
Debt is not automatically
a sign of poor 昀椀nancial
management. Home loans,
education costs and other
borrowing may support
long term goals. Problems
can arise when expensive
debt grows faster than it
can be repaid.
Credit cards, payday loans
and repeated short-term
borrowing can make an
already tight budget more
dif昀椀cult to manage. When
possible, continue making
minimum repayments
on every account while
directing additional
money towards the
highest interest debt.
Stopping new debt from
accumulating is equally
important. A repayment
plan will struggle to
gain ground when credit
continues to fund regular
living expenses.
Anyone who is unable to
meet repayments should
contact their lender early.
Financial service providers
have hardship processes
and may be able to adjust
repayments or offer
temporary assistance.
Waiting until several
payments have been
missed can reduce the
available options.
