January financial wrap up

Ben Tosi

Thursday 01 February 2018

You might not have been paying attention during the first month of 2018 and who could blame you - there were beaches to get to, bevvies that needed drinking and books that simply had to be read.

You might not have been paying attention during the first month of 2018 and who could blame you - there were beaches to get to, bevvies that needed drinking and books that simply had to be read.

But now you’re back in the daily grind and while you might have been snoozing on the big money headlines to come from January, we certainly weren’t. So sit back and soak in all of the must know finance info starting with…

Debt blasting details

January is certainly the biggest month of the money calendar when it comes to personal finance and if one of your big new year's resolutions is to become debt free in 2018 there are a few things you should know.

First up, meet your new best friend - a balance transfer credit card. These bad boys will let you stack all of your debt on one, neat credit card statement and give you an interest free period to attack your debt. But more importantly, Mozo research found that when used properly, these plastics can save you as much as $755 during your quest to become debt-free. Fortunately for you, we’ve also wrapped up some of the biggest balance transfer traps to avoid to keep you on track in 2018.

RELATED: October financial wrap up

These cards aren’t your only option, however. Maybe a debt consolidating personal loan is more your style? These are a good option if you want to keep the ongoing interest rate low and take a slow and steady approach to your debt-blasting procedures and in January, providers both big and small made cuts to personal loan products. If you prefer the security of one of the big banks, Westpac offered customers a chance to slash 1.00% p.a. off their unsecured personal loan by consolidating their debt - dropping the interest rate to 11.99%. But if you’re after a more homely vibe (and a cheaper rate), Police Bank announced a Debt Consolidation Loan last month with a competitive 7.90% rate.

And last of all, we all deserve a pat on the back as our nationwide credit card bill fell for only the third time in history. But let’s not get ahead of ourselves, according to the Australian Bankers Association that figure still sits at a staggering $52.2 billion - so get blasting, Australia.

Savvy saving tips

If debt-free living isn’t one of your resolutions, it’s likely that saving a load of money over the next 12 months is, and January has seen a stack of saving tips surface in the news. To kick things off, Mozo outlined five ways to save $500 this year along with some common mistakes to avoid if saving your precious pennies are top priority (SPOILER: You shouldn’t be carrying a balance on your credit card).

These tips are made all the more important considering the wide range of cuts to deposit taking accounts last year - a trend that looks set to continue in the early stages of 2018. In fact, Mozo’s term deposits database recorded more than 80 rate cuts in January, with fewer than 20 rates moving the other way, and it is a similar story when it comes to savings accounts, with the big four cutting base rates over December and January. All this means is that it is even more important for Aussie savers to shop around when trying to nab a competitive term deposit or savings account.

RELATED: November financial wrap up

While you might be trying to add some size to your savings stash, losing an extra kilo or two might also be a new year’s resolution - but what if I told you, you can do both? That’s the latest insight to come from Mozo research which showed that dropping your CrossFit membership in favour of more frugal forms of exercise could save you more than $3,000 per year. 

Eek, time to talk about energy

One of the hottest issues of 2017 has already reared its head this side of January 1 as we swelter through another Aussie summer. It first hit headlines early in the month when Victorians nervously awaited the annual January pricing updates and while there was some reprieve from the likes of GloBird Energy who dropped prices by almost 17% - the majority of retailers hiked prices, adding as much as $69 to the average quarterly energy bill. You can check out the major changes here.

Moving north, if you’re from Sydney, congratulations - you’re a real survivor and as it turns out, so is our energy grid. Supply issues were cooled after we (just) survived the hottest day on earth in early January without suffering any huge outages.

And the good news continued as the Clean Energy Regulator announced Australia is on track to reach its renewable energy target by 2020, with this form of environmentally-friendly energy likely to be a whole lot cheaper than its fossil fuel alternative pretty soon. That is particularly helpful considering that data from Green Energy Markets revealed that rooftop solar installations grew by a third in 2017 to 172,152 units across the country.

Want to make solar energy a priority in 2018? Check out our state-based energy plan comparison tables to find a better value energy plan and find out whether a green option exists with that particular provider.

Home ownership in 2018

And wrapping up this wrap up with another of the hottest issues to hit headlines last year - the housing market. With prices cooling slightly, first home buyers could see 2018 as the year they finally dive into the wild world of homeownership after being given some much-needed help over the course of January.

For example, SCU launched a home loan package specifically available to first home buyers that features a competitive 3.77% variable interest rate (3.81% comparison rate) and a forty year loan term, meaning the ongoing repayments are a little more affordable even if total interest over the life of the loan might be higher.

Meanwhile in Victoria, first home buyers could soon be buddying up with the Andrews Government after it launched its HomesVic initiative in January. The shared equity scheme will see the government cover up to 25% of the initial property price for young Aussies, meaning they only need to stump up an additional 5% deposit to get into the property market. It will be available for close to 400 Aussies who will be forced to pay back the amount when they sell and you can register your interest here.

Oh and if you want to see what we think the housing market will do in your state this year, check out our in-house expert Steve Jovcevski’s bold property predictions.

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