Financial planning

Debt-busting challenge: make one change a day this July


Kick the new financial year off by having a go at a debt busting challenge this July. Making just one small change each day in will make a real difference. Breaking lifestyle changes down into small components like this is often a much more sustainable way to cement permanent change, rather than trying to achieve everything all at once.

July 1:    Make a resolution right now that debt repayment will be your top priority. List of all your debts and commit to paying down the one with the highest interest first. Call your bank and investigate rolling your debts into one loan with a really low interest rate – such as your home loan.

July 2: It’s time to analyse spending. Tonight, draw up a document to use this month to track your spending over the next month. Developing awareness of your weak spots is key to change.

July 3: In your lunch break today, get to know your entitlements. People shouldn’t fall into the trap of thinking government support is only for a small section of the community. Don’t assume you will not qualify as you may be surprised to learn you are in fact entitled to some financial relief from the Government. Get on the phone and make some calls and ask the question – you’ve nothing to lose.

July 4: Reduce waste and start saving by writing a weekly meal plan that includes meals designed to use up leftovers. If you’re stuck for ideas, hop online and google ways to get creative in the kitchen. Also commit to only buying food that’s in season and switch to home brands: there is usually little difference in quality.

July 5: Contact Medicare to check that you and your partner are both registered as a family for the Medicare Safety Net and not as two individuals. Together you are more likely to hit your Medicare Safety Net threshold (determined by your income) much sooner and be entitled to higher rebates for the rest of the calendar year. 

July 6: You don’t need the latest phone. Resolve today that the next time your contract is up don’t get sucked into upgrading. Keep the handset and switch to a capped monthly spend. Also put a limit on how long you spend on social media on your phone – overuse can cost you in hefty fees.

July 7: It is high time to quit your vices – smoking, sugar, booze – or whatever your indulgence. Start a health kick and you’ll save heaps and add years to your life.

July 8: Cancel your gym membership today and decide to start pavement pounding. If it’s raining, grab a skipping rope and work-out undercover at home. Contact some friends and ask them to join you. Not only is this good motivation but also, by committing to socialising by exercising with friends rather than eating out you’ll save.

July 9: Switch off power points at the mains. Do this whenever you are not using items like the microwave, phone charger or television and use energy efficient appliances and light bulbs.

July 10: By now you may have your group certificate and be able to get cracking on your tax return. If you receive a lump sum payment from the Government, resist the temptation to splurge and decide right now that you’ll use this money to pay off some debt. By reducing your debt you will save on any interest expenses you have.

July 11: Resolve to start paying bills annually upfront, such as your car registration and insurance, rather than fortnightly or monthly. You can often save considerable amounts of money this way.

July 12: Look up bulk-billing GPs in your area today and make the switch.

July 13: Today it’s time to review your health insurance. Check you’re not paying for things you don’t need (like maternity if you’ve finished having babies) and compare your policy with what other insurers can offer.

July 14: Resolve that from now on you’ll say no more often to yourself and others (kids, I’m looking at you…) And put a freeze on buying things that are non-essential until you are debt-free. Resolve to quit keeping up with the Joneses and work on changing your inner dialogue: refrain from convincing yourself that you ‘need’ something that you know is really only a ‘want’.

July 15: Consider how you travel. If you’re driving everywhere, investigate whether you could car pool or catch public transport – or better yet, cycle or walk. When you genuinely need a new car, consider ex-leased models or second hand cars. Do your homework so you don’t end up with a costly lemon and negotiate a good price. If you’re in serious debt, defer buying a new car.

July 16: Instate a thinking period on purchases. If you find yourself looking at something you think you need, walk away and wait a week. In that time consider if you do really need it. 

July 17: The cost of hair care can be truly hair-raising. Find a hairdresser who works from home: they are usually experienced and cheaper. Also switch to cheaper hair products: don’t buy salon-only brands while you’re in debt.

July 18:   It’s the middle of winter and keeping warm can come at a cost. Wear jumper before switching on the heating, use a door snake to keep heat in your rooms and take a hot water bottle to bed rather than using an electric blanket.

July 19: Cancel Pay TV until you’re debt free – and any subscriptions to magazines or newspapers. This is definitely a non- essential spending territory.

July 20: Find an egg timer and put it in the shower. Use this every time you shower and stick to 2-3 minutes only. Ensure your garden is water efficient and plant natives that need little water.

July 21: Genuinely need something? Don’t buy new, source second hand online or at markets.

July 22: Decide that from now on you’ll say no to home parties where you feel obliged to buy – even when the host promises it is obligation free.

July 23: Buy non-perishables you need in bulk when on sale, but make sure you don’t fall into false economies where you buy stuff you don’t need simply because it’s on sale.

July 24: If you’re in serious debt, resolve to give up all holidays until you’ve paid it off. If you’re in debt but want to become debt free considering only travelling locally and cheaply. Think camping or basic cabins and only outside peak season. Or why not consider a stay-cation? That is, stay in your home town and spend a week truly exploring all the wonderful free things life has to offer.

July 25: If you have a weak spot for buying designer labels, stick to classic, timeless pieces that are reasonably priced – and don’t buy items that need dry-cleaning. And if you’re in really bad debt, commit to a total freeze on buying clothes for the next year. It may be a challenge but think about the long term rewards.

July 26: From today make a conscious effort to stop window shopping (including online) – it can be a slippery slope to the land of unnecessary buying. If you need to pop to the shops, stay mission focussed!

July 27: Consider your meat consumption. Step away from the fillet mignon and other expensive cuts and instead buy the cheap cuts and get familiar with slow cooking.   And consider having a night or two each week – meatless Mondays can become a family favourite. 

July 28: Set a limit on birthday and seasonal gifts and stick to it strictly. Stock up on $1 and $2 birthday cards – cards that are $5 and up add up over time.

July 29: Next time you have to re-insure your vehicle call at least three other insurers and let them know the cheapest quote you’ve got- usually they’ll match or better it.

July 30: There’s only five months til Christmas! Talk to family about doing secret Santa for Christmas this year. Instead of buying a gift for all, take the lead in organising a hat-draw where all family members will get one person to buy for with a cap on how much to spend.

July 31: Welcome to budget day. Review your ‘tracking spending’ document and work out areas of spending where you are prepared to cut back. Then find a budget online and complete it thoroughly – don’t guess, go back through old records to check how much you actually spend each month on different items. Stick this budget somewhere visible and review it every month.

If you don’t cheat and strictly follow these lifestyle changes, with commitment and a determined attitude, most people can climb out of debt. Small changes make a big difference.

Just think where you’ll be this time next year – and remember the old saying: look after your cents and the dollars will take care of themselves.



ABS, Australian Social Trends 2014 – issue 4102.0. Household debt includes all types of debt – everything from study loans to credit cards, home and investment property debt.

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  1. Pingback: Are you in financial control? Our top 9 articles and websites to help you save money in your 50's - Balance by Deborah Hutton

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