How to Fix My Debt Problems – Five Budgeting Tips That Can Help Manage Debt

Dominique Grubisa
Dominique Grubisa

Published 4:09 am 4 Mar 2020

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“How to fix my debt problems?” is a question plaguing record numbers of Australians. In this article, DG Institute founder Dominique Grubisa discusses debt management.

How to fix my debt problems?

  1. List Your Expenses and Income Sources
  2. Account for Irregular Expenses
  3. Figure Out How Much You Owe
  4. Prioritise the Most Expensive Debts
  5. Talk to Somebody About Your Debt

“I need to pay my debt.

Is this thought haunting your mind?

If you’re seeing your bills mounting up and your money running out, you’re not alone. Australia has a growing debt problem that’s only getting worse. 

Right now, we as a country have the second-highest level of household debt in the world. That means our collective debt to income ratio is terrible. Many of us owe more debt than we can pay and the debt collectors are rubbing their hands in glee.

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Debt Recovery

It’s no wonder that they’re making record profits right now. You need to know how to climb out of debt to escape them. 

We’re going to give you the tips you need. But first, let’s look at somebody who successfully escaped their debt.

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How Smart Budgeting Saved Miriam

To the outside world, Miriam looked like she had all of the trappings of success. Both she and her husband had good jobs that provided them with a high income. They had a BMW parked on the drive, and even owned a couple of investment properties.

But that didn’t tell the whole story.

Behind these status symbols, Miriam had debts amounting to $100,000…without even considering her mortgages. Worse yet, she had absolutely no savings to speak of.

The stress started to mount up. As she put it when talking to ABC News:

“It was very stressful. It was stressful on my marriage – we were fighting all the time. Because we didn’t have any liquid cash to do anything, we didn’t have any cash to actually live.”

“It just sort of spiralled out of control. And we were still lying to ourselves thinking everything was fine, but it wasn’t.”

Her outstanding debt kept growing as she tried to pretend that it didn’t exist.

Then the calls from the debt collectors started. 

Miriam could no longer act like everything was okay. Those calls forced her to confront her debt issues, lest she get overwhelmed by them.

She reached out to a debt recovery specialist to find out what she could do. Together, they created a budget and developed a debt management plan. They also took a closer look at some of Miriam’s loans. Her car finance, in particular, seemed to be the result of irresponsible lending.

Miriam renegotiated some of her debts and created a budget to handle the rest. Over the course of three years, she managed to repay $65,000 of what she owed. And while she’s not out of the woods yet, she’s certainly in a much strong position than she used to be.

There are two key things to note when reading this story.

First, the appearance of success and good financial standing doesn’t mean a person doesn’t have debt problems. When you saw her driving her BMW, you would never have guessed that Miriam had over $100,000 of debt to deal with.

Second, you need to have a plan in place to confront your debt. And with these five tips, you can create that plan.

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Tip #1 – List Your Expenses and Income Sources

Your first step is to figure out what’s happening with your money.

First, create a list of your income sources so you can see the total amount of money you have coming in every month.

From there, create a list of expenses. For now, focus on the regular monthly expenses that you face, such as your mortgage and bills. Any debt repayments go onto this list, as do subscriptions and your average grocery bill.

This will give you an idea of the scale of the problem. If those monthly expenses exceed your income, you need to take action quickly. Use your bank statements to confirm that you’ve gotten the numbers right.

Tip #2 – Account for Irregular Expenses

On top of your monthly expenses, you have the irregular expenses that drain more from your income.

These include bills that you don’t pay monthly. For example, you may have an insurance policy with a quarterly or yearly payment scheme.

Irregular expenses also include the impulse purchases you make without thinking. You’ll likely see that you spend a lot of money on things you don’t need.

Add these expenses to your regular ones, and you’ll get a better idea of how much you’re really spending.

Tip #3 – Figure Out How Much You Owe

Now that you know what’s happening with your money, it’s time to figure out what’s happening with your debts.

Create a list of each debt you have and figure out the total amount you owe. The number may surprise you. However, it will also help you see just how much work you’ve got to do to recover from your situation.

Tip #4 – Prioritise the Most Expensive Debts

With your list of debts in front of you, figure out which ones cost you the most. Typically, these are the ones with the highest interest rates attached to them.

These costly debts are the ones you need to pay off as quickly as possible. Even a small loan can become a major problem if it comes with a high interest rate.

Prioritise the debts that you can get rid of quickly or that charge you a ton of interest.

And finally…

Tip #5 – Talk to Somebody About Your Debt

The biggest problem we see with debt is that people don’t want to talk about it. Debt is a taboo subject, which means that so many people just don’t confront it.

You need to put it out in the open.

Talk with your friends and family about your debt and you’ll finally lift your blinders. From there, you’re ready to confront your debt. This is when you should contact a debt recovery specialist

That’s what Miriam did, and she’s now on track to escape a six-figure debt in about five years.

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Good Debt Vs Bad Debt With Dominique Grubisa - DG Institute

Lawyer, Asset Protection Specialist and Property Educator

Dominique Grubisa is a practising legal practitioner with over 22 years of legal and commercial experience. She is a property investor and developer, an entrepreneur with businesses in Australia and Southeast Asia, a speaker, educator, writer and published author. You may contact Dominique at

This column has been written for general information purposes only. It is not intended as legal, financial or investment advice and should not be construed or relied on as such.

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