Do you have FOMO and is that contributing to your financial prosperity, or keeping you up at night?
Comparison website Finder recently reported that household debt hit a record high of more than $2.5 trillion at the end of December — an average of more than $257,000 per household, which represents more than 180% of disposable income which is one of the highest rates in the world according to recent reports.
More than half of Australians’ debt was in the form of credit cards followed by personal loans, car loans, buy-now-pay-later services, and payday loans last year, according to Canstar’s Consumer Pulse report.
Credit card debt fell to 56 percent last year from 67 percent in 2019 as consumers curbed spending in shops and restaurants during the Covid pandemic.
However buy now, pay later debt nearly doubled to 18 percent from 10 percent over the same period given the fast growth in the online-based payment schemes.
So the question begs, are you making impulsive decisions that you regret later because you don't actually need to pay now?
If so, time to cut up those cards, and speak to us about debt consolidation, to get your payments, rates, and debt down, and power up that debt reduction while interest rates are so low!
Want to save $108,000? We can do that! 🙋♀️💰🏡
Recently, the comparison provider Compare Club conducted a poll that 80 per cent of Australians cut back on spending during the three months to June so they can cover their bills.
Of the 73 per cent of consumers found to have received a bill that cost more than expected, 50 per cent avoiding to eat out, and 35 per cent cut down on their saving.
The majority of those surveyed were property owners who spent one-third of their income on home loans.
Despite the low interest rates now, more than half of the respondents had not considered refinancing!
According to Compare Club Home Loans' general manager, Matt Gatt, a homeowner with a mortgage of $450,000 could save around $3,600 annually and more than $108,000 for the entire mortgage if they reduce their interest rate by 0.8 per cent.
Investors were most likely to refinance, with multiple properties because of their experience in the market.
Out of 10 first home buyers, 9 of them are actively looking to cut costs, with 79 per cent comparing service providers and 59 per cent making a switch.
40 per cent of younger homeowners (aged 25-34), are more than twice as likely to compare and switch than those aged over 54, at 15 per cent.
It is the youngest consumers who had experienced the highest rates of bill shock and had searched for ways to cut living costs, with half switching to more affordable providers.
In contrast, consumers aged over 54 experienced bill shock, but in response, only 12 per cent switched service providers to refinance.
Want to know more on refinancing your home loan?
Feel free to reach out so we can provide options for you and you can start saving!
Rachael Bland – Founder & CEO