Home loan savings reduce "dumb debt"

The money saved on new low interest home loans should be put towards cancelling out “dumb debt” such as that owed on credit cards and car loans, one financial planner has recommended.

In an interview with the Advertiser, Bruce Brammall points out that Aussies will save an average $600 a month on a $320,000 variable home loan now as a result of the rate cuts in the last quarter of 2008.

And with most experts united in their belief that 2009 is going to be a bad year for the Australian economy, Brammall suggested paying off debts and trying to create a buffer in the event of a recession by putting money into savings accounts.

Meanwhile, fellow financial expert Jamie Scott-Young advised the Generation Xers: “We need to leave the consumption to the baby boomers … We should make a few sacrifices now, be prepared to think and plan for the long term.”

In an interview earlier this week, Keyinvest money guru Ian Campbell advised that people should look to get the most out of savings accounts to see themselves through this grey spell.