Viw Magazine

Business Coach


  • Written by Kristina Plimer

How to pay off your credit card debt this year, with tips from The Wealth Tutor

A significant number of New Year’s resolutions are related to money – whether it’s vowing to save more to achieve a specific goal, create a budget, pay off debt or curb bad spending habits. The Wealth Tutor, founded by Kristina Plimer, is a coaching and mentoring service that assists people in managing their wealth. Kristina describes herself as a ‘wealth psychologist’ because of her emphasis on the psychology of spending and how every clients differs when it comes to the challenges they face in saving. She has compiled the following tips for those of us who dream of a debt-free future:


  1. Stop making more debt – “So many of my clients live with the mindset that debt is a necessary part of life, and I don’t blame them. Banks, stores and loan and credit card companies spend millions marketing to us with the message that we need stuff to be happy. You need to actively fight this mentality and realise that happiness comes from many things that cannot be bought – financial peace of mind being one of them. Before buying anything (and I do mean anything), ask yourself if you need it and if you do, if there is a cheaper alternative.”


  1. Prioritise debt – “All debt is not created equal. While it may make sense initially to pay off an old debt or a small debt, you should always prioritise the debt with the highest interest rate. In doing this, you can reduce the amount of time that you’re in debt and the overall amount you have to fork out.”


  1. Don’t be fooled – “Credit card companies will often offer attractive introductory offers to get your business. You should take full advantage of these but make sure you triple-check the terms and conditions to avoid getting stung when the offer period ends. Although a 0% interest rate may sound compelling, transferring your balance also runs the risk of having a negative impact on your credit rating. Check with your bank if this is the case. Moving from one card to the next to lower interest payments is often a band aid solution. The only way to kill your credit debt forever is to make long-term changes in your spending behaviour.”


  1. Budget – “A budget is as psychologically beneficial as it is financially. It gives you peace of mind that you’re on track and in control of your finances, which greatly reduces the stress that inevitably comes with debt. The first thing I do with all my clients is ask them to make a list of all their expenses over a period of time. We then decide what is really important to them and which purchases can be cut back on. Make a weekly spend budget and return to it on a weekly basis to see where you can make further savings – you’ll be surprised at how much you can save! While doing this, add an amount to the budget which you can realistically afford to repay debt, whether it’s $20 a week or $200. It’s helpful to make your required payments on pay day so that you won’t be tempted to dip into this money.”


  1. Make repayments strategically – “Lay out your credit card debt in order of interest rates to work out where your debt repayments should be going. Ensure all minimum payments are made to avoid fees related to missing a payment. Then pay back the debt at the top of your list and move downwards until you’re in the clear.”


  1. Reward yourself – “For some people, rewarding themselves for hitting debt reduction targets is a hugely effective motivator. Of course, it’s important to think of low-cost ways to reward yourself such as a pamper night with friends, for example.”


  1. Don’t beat yourself up – “A strategic debt repayment plan is fantastic if life runs smoothly, but we all know this isn’t always the case. Somewhere along the road there will be an emergency and an unforeseen expense which means that you won’t meet your goal that month or that week. The important thing is not to let this get you down, and to get back on track as soon as you can.”


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