Money disputes on the rise among young Aussies: Here’s how to better handle debts

Amid the soaring cost of living, a new survey commissioned by bill splitting app KttiPay shows that borrowing money among friends and family is rampant, with one-third of Aussies saying that someone they know currently owes them money.

An alarming 67% of Aussies between the ages of 18 and 35 currently owe money to their family and friends, are owed money, or both. This has resulted in more than $350 billion being transferred between friends and family every year.

All this is surely hitting hip pockets at a time of higher inflation and high-price living.

Many young Aussies left out of pocket $100 to $500

Around 40% of respondents say they are owed over $100 with some being out of pocket as much as $500 or more. 

The impacts of this are being felt in negative ways. For example, many people admitted they have argued with others over what they owe after the money has already been spent.

Around 70% of respondents encountered a shared expense at least once a month, including restaurant bills, home expenses like groceries, rent, and electricity and group outings.

But many are finding that splitting costs isn't always fair, equitable, or straightforward. 

How to better handle money and debt in 2024

In light of these findings, 98% of respondents rated transparency in group spending situations such as having the ability to access receipts as important.

Sixty-eight per cent of young Australians go as far as to label transparency as either ‘important’, ‘very important’, or ‘extremely important’, as per the survey. 

“A considerable number of young Australians are in informal debt situations, either owing money to friends, being owed money, or both,” said KttiPay founder and chief executive, Iain Salteri. “As financial pressure continues to mount, money disputes have increased power to tip relationships over the edge. 

“It’s clear that Australians are exhausted from having countless unproductive and awkward conversations with people who owe them money, but without an easy solution, their hard-earned money remains out of reach.”

However, Salteri says group spending tools that keep Aussies more accountable for their debts are proving successful for tech-savvy Gen Z and Millennials. 

If you’re keen on these types of tools as well, we cover some of the best budgeting apps on the market which you can read about here. 

A debt consolidation loan can also provide some relief

Another way to get on top of debt is with the help of a debt consolidation loan. This is a financial product that lets you consolidate your debts into one personal loan. If you’re well organised, this allows you to have just one set of recurring repayments to make over a set term, and with just a single interest rate.

The real plus? You’re likely to be better off if the interest rate on the personal loan is lower than your existing debts, helping you get ahead in reducing your overall debt.

Once you’ve compared some of the best debt consolidation loans on the market and seen the different interest rate levels available, it’s worth considering if you’re in a position to apply. Among other things, you’ll need to think about the term of the loan, the frequency of repayments and whether or not you’d be better off securing the loan with one of your personal assets, such as a car. This approach can often lower the interest rate and fees of the loan.

Just keep in mind that like any other kind of lending, a debt consolidation loan could hurt your credit score if you aren’t responsible with meeting your repayments.

Paying off lingering debts is a good thing though, and will usually be a positive move not only for your credit history but for your finances in general. So, if you’re ready to compare debt consolidation loans, be sure to start comparing some of the top loans on the market below.