Australians are getting better at saving and paying off debt – but we can always use a little help! Check out these top tips for conserving your cash…
More Australians than ever are boosting the size of their piggy bank, with new research from St. George showing the number of households saving money has almost doubled over the past three months.
But aside from saving for a dream holiday or home renovations, an increasing amount of Aussies (the highest levels in close to a decade) are using their savings to pay down debt.
Andy Fell, General Manager St.George Retail Banking, says the trend of saving is not new for Australians.
“Australia is a nation of savers, and while we all love to shout ourselves on a holiday every now and then, we’re seeing more people that are focused on paying down their debt to get into a better financial position,” he says.
“To help, we’ve put together some tips for Aussies who want to tackle their level of debt and get back to saving for their next holiday or home renovations.”
Top tips for paying down debt:
1. Stop adding to your debt.
The first step is to make sure you are no longer adding to your debt unnecessarily. Know your limits, keep your goals in mind and think about whether or not you can really afford your next purchase.
2. Pay off the highest interest rate first.
Rank your debts with the highest interest rate at the top – focus on paying this one off first and then work your way down.
3. Consider consolidating your debt.
Get the right advice from your local banker to see if consolidating your debt is the right move for you. We’re seeing an increasing number of people visiting their local banker to review their finances, which is great.
4. Pay more than the minimum amount.
Work out what you can afford to pay each month and pay this amount rather than only the minimum. Even small amounts make a big difference over a year.
5. Look for competitive rates on zero balance transfers.
Investigate and find the best deal on zero balance transfers so you can save on the interest and pay down the principal quicker – for instance, St.George currently has a 0% p.a. for 14 months on balance transfers requested at application (offer ends 20 June 2014).
6. Set a budget and repayment schedule.
Create a comprehensive budget which includes all types of income, your quarterly bills, repayments and general expenses, so nothing crops up unexpectedly. A budget planner on the St.George mobile app is a great place to manage your expenses.
7. Set achievable goals and reward your progress.
Don’t be too hard on yourself, take some time to plan goals that you can reach and reward yourself with something small each time you achieve a goal.
8. Change at least one habit.
Choose something you regularly buy and see if you can cut back and re-direct the savings to your debt. You’ll be surprised how quickly it adds up.
“Setting a budget is an important step in the process for paying down your debt,” adds Fell. “It will help to keep track of your spending and see where there is extra room to increase your repayments.”