1 in 4 working Australians are ignoring their $18 billion debt, new ING research finds
New ING research found nearly 2 in 3 working Australians have debt besides a home loan hanging over their head, and in total, they’ve racked up a staggering $18.1 billion over Christmas alone. That’s an average $934 per person!
But when it comes to clearing that debt, as many as 25% of respondents are turning their heads the other way. Millennials appear to be doing the worst of the bunch - more than half admitted to sweeping their debt under the carpet, while 44% said they aren’t even sure how much they owe altogether.
The problem of staying silent about debt
According to ING’s survey, there’s a reason for the zipped lips: many Aussies feel too anxious or embarrassed to open up to family and friends about their finances.
In fact, 2 in 3 of respondents said they would rather talk about any other topic, including problems at work (66%) and relationship troubles (58%).
ING’s spokesperson, David Breen, said the taboo around discussing debt can cause people feeling stuck in a financial rut to lean on bad money habits, instead of seeking help from their loved ones or a financial advisor.
“The problem with not talking about debt is that options to solve the problem don’t then readily present themselves,” he said.
“Stigma related to loans and debt mean we’re a nation too embarrassed to discuss our finances. The research revealed that it can lead to Australians turning to gambling, rather than looking at options like debt consolidation to help manage repayment of their debts.”
A concerning 33% of respondents admitted to either gambling or entering lotteries, in a desperate attempt to earn back enough winnings to clear their debt faster. Another 36% took up more work or another job while 19% borrowed money from family.
Although a large chunk of respondents (65%) did go down the financially healthy route of cutting back on spending, the other 35% said they didn’t even consider this as a method for getting rid of debt.
Meanwhile, 6 in 10 Aussies said the option to take out a debt consolidation loan never crossed their mind either.
RELATED ARTICLE: New me, debt free: how to ditch your debt in 2020
Quick tips for clearing debt
With over a quarter of Aussies living from paycheck to paycheck and struggling to save up, it’s more important than ever to adopt savvy strategies to kick debt to the curb. Here’s a few tips to get you started and help you get back on your feet in 2020:
- Tighten up your budget: From eating out less often to lowering your energy bill, there are plenty of ways you can reduce your spending and whip your budget back into shape. Use our budget calculator to see where your money is going and which expenses you can afford to cut down.
- One debt at a time: Prioritise your debts by starting either with the highest interest first, or the lowest balance first. By focusing on one debt at a time, while meeting only the minimum repayments for all your other ones, you can chip away at your dreaded debt in a manageable way.
- Roll your debts together: Too many repayments to juggle? That’s when a debt consolidation loan can lend a much-needed hand - it combines all your debts into one loan with a lower interest rate, helping you save potentially hundreds, if not thousands, on interest.