Mozo reveals: Australia’s worst financial habits
For a lot of us, biting our nails, smoking a pack a day and eating one too many burgers are some of our worst habits.
But according to a recent Mozo survey, racking up credit card debt is the country’s worst financial habit - accounting for 24% of the Aussies surveyed.
This was followed by failing to have a financial buffer in case of emergencies (22%) and having little or no budget (19%).
“Our research shows that many Australians are putting themselves at risk of financial strife by not heeding to the financial basics like putting aside for a rainy day or having a workable budget in place,” says Kirsty Lamont, Mozo Director.
Australia’s worst financial habits
|Credit card debt||24%|
|No financial buffer for emergency situations||22%|
|Have multiple credit cards||17%|
|Use credit card to pay for fixed expenses like rent and bills||15%|
If you’re an Aussie committing any of the five worst financial habits and are currently cringing, don’t worry, because we’ve got a few tips to help get you back on track
The habit: Building the debt pile
Debt is a tricky habit to kick, since we often don’t know where to start. So to blast debt for good in 2018, pay down any existing high-interest debt, like a credit card, first.
“Funnel any additional funds like a Christmas bonus or cash gift from family into paying down debt first. Once your credit card debt is paid off in full, tackle the next highest interest rate loan you have, and so on, until all of the balances dwindle to zero,” recommends Lamont.
The habit: Failing to save for an emergency account
While you’ll hope to never have to use this account, it’s always better to be safe than sorry and make regular deposits. An emergency fund is an account to store money that could be needed in an unpredictable situation, like illness or unemployment. You should aim to have at least three months worth of living expenses on hand.
But to do this effectively, you’ll need a budget.
The habit: Lacking a budget
“One of the most common approaches to budgeting is the 50/20/30 rule where half of your income goes to the essentials like the mortgage and utilities, one fifth is spent on financial priorities like boosting super or a rainy day fund and around one third is put towards lifestyle expenses,” says Lamont.
A budget can help you track where your money is going as well as helping you get control back over your spending.
The habit: Using multiple credit cards
Having and using multiple cards can really add to the bill (and debt) pile. So it might be a good idea to let your plastic collect dust. And if you do have multiple bills coming your way, it might be worth looking into getting a balance transfer credit card. This way, you can move all debt into one, manageable place. Just make sure to not fall into any balance transfer traps!
The habit: Using your card to pay for rent or bills
If you find yourself leaning on your credit card to help pay for your utility bills, the start of the new year could be the right time to do an audit of your household expenses. You may also find that there are fresher, more competitive deals that can help ease the financial strain.
“Call up your current providers to ask for a better deal and don’t be afraid to take your business to a competitor if they won’t deliver. When it comes to the mortgage, a recent Mozo mystery shop found the Big 4 banks are offering discounts of up to 0.82% to those willing to ask for a better deal. This equates to potential savings of $45,000 over the life of the loan.”
Ready to start afresh with a balance transfer credit card? Compare the latest deals on balance transfer credit cards today.