It is crucial for Australians planning to buy a property as their first home or as an investment to manage their debts efficiently.

It is crucial for Australians planning to buy a property as their first home or as an investment to manage their debts efficiently, a property expert said.

While not all debts are bad, there are those that cost borrowers money and are difficult to manage, Metropole Wealth Advisory Ken Raiss said in a think piece on Property Update.

He said there are four strategic ways to get out of a debt hole – and the first thing on the list is to track spending. Raiss said it was essential for those who struggle with debt to have an overview of how much they spend every month.

"A good way to do this is to create a spreadsheet or similar where you can input all of your spending in a month. If you do this for a month or two, you will soon start to see where all of your money is going," he said.

Also Read: Aussies still burdened with high debt

The next logical step is to have a budget and stick to it. However, Raiss said there are those who create so rigid a budget that they eventually end up breaking the plan.

"No one wants to live on baked beans to reduce their debt, so it's important to create a realistic budget. In my experience, an unnecessarily strict budget is doomed to fail from the start," he said.

Aside from tracking spending and budgeting, Raiss said it is also advisable to take advantage of the sharing economy trend and start earning extra cash.

"Again, be realistic about the time that you have available to take on extra work. Reducing debt shouldn't turn you into a slave to the red numbers while you're trying to turn them into black ones instead," he said.

Also Read: Aussies drown in debt despite low cash rate — CoreLogic

Last on Raiss' list is eradicating the source of the problem — credit cards. He said many Australians commit the same mistakes when it comes to dealing with credit cards, which eventually results in the pile-up of debt on their accounts.

Instead of using credit cards, he said it is better to use debit cards to ensure that what people are spending is not the money they do not have.

"Too many Australians get caught in the debt-trap of paying the minimum off their credit card every month, which means they'll likely never pay it off. The thing is you can reduce your debt by preventing it from building it up in the first place," he said.