money tips Archives - Credit Simple

The simple step to help you pay down debt? Speak up.

Credit Simple — Wed, 10 Feb 2021 21:54:43 +0000

If you’re feeling anxious about your debts, it’s time to start communicating. Here are five steps you can take to talk to your credit providers about debt.

1. Call your credit providers

If you’re feeling overwhelmed by debt, give your credit providers a call. It is in their best interests that you make your repayments, so there is no harm in having a chat.
Call your utility company, telco or lenders and explain your financial hardship. If the customer representative you’re speaking with is unhelpful, escalate your call to a hardship officer or manager.

2. Talk it through

Go through your options with your credit provider. They may be able to offer you more affordable repayment plans, due date extensions or hardship variations.

Many credit providers can amend their terms to ensure you can continue to pay. You might be surprised at the options they have available to you.

3. Aim to agree

By now you would have done a budget and know your incomings and outgoings. While the aim is to at least meet minimum repayments, you should have a good idea of what you can and can’t afford. Therefore, if there is no way you can meet your minimum obligations, you should negotiate alternative payment structures. And if your situation changes, let them know straight away.

4. If debt issues persist

If you’re still finding it difficult to get on top of your debts, you can reach out to the National Debt Helpline on 1800 007 007 or contact a Financial Counsellor. The National Debt Helpline can put you in contact with your local service.

5. Don’t be lured by quick fixes

There are many providers out there promising to consolidate your debt, refinance and transfer your balance. Some of these can be legit and may help you. But they can also add to your financial burden through hidden fees, higher interest and lock-in contracts.

Our advice: be aware! Don’t look at these options until you have spoken with your current providers about your situation.

For more tips on how to stay on top of your finances, sign up or log in to Credit Simple.

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The first 3 steps to paying down your debt

Credit Simple — Wed, 03 Feb 2021 22:01:54 +0000

Have you entered the new year with existing debt from 2020?

You’re not alone. More than one in three Aussies enter January with Christmas debt from one year to the next¹.

When you combine this with household debt, credit card debt and buy-now-pay-later owings, it’s fair to say many of us will need a helping hand to get on top of our bills.

Household debt has significantly increased with the latest household to net disposable income ratio sitting at 210%², meaning that on average, people have debt equal to two years’ disposable income. There are also more than 13.7 million credit cards in circulation accounting for a national debt of $21.1 billion³. The buy-now-pay-later (BNPL) industry is also booming. As of June 2019, there were more than 6.1 million accounts, representing 30% of the Aussie adult population and totalling more than $5.6 billion in the 2018-19 financial year⁴.

As we enter the new year, we have outlined three easy steps for you to start the year on the right foot and tackle your debts in 2021.

1. Lay it all out on the table

This first step is easy. Grab all your latest bills, statements, invoices, anything you owe. Go do it now, we’ll wait…

Find the most recent copies of your mortgage, rent, electricity, water, gas, phone, internet, car insurance, credit cards, BNPL statements and physically lay it out on the table.

Debt can feel overwhelming. Seeing what you owe and tallying it all up is confronting but it is also a good motivator to get on top of it.

With each debt work out how much you owe and the repayments.

This will prepare you for step 2.

2. Identify your smallest debt

So, you’ve laid out your debts and identified the monthly repayments. Next, grab a piece of paper and list the debts from smallest to largest by outstanding debt amount. Number 1 will be the smallest.

Keep this list handy! Store it in the same folder as all your other bills and expenses.

Now, grab your bill with the lowest debt and keep it in a visible place – maybe the fridge, bathroom mirror, anywhere you can see it.

Your focus over the next few months will be to use any savings you have after making your monthly debt repayments, to pay off the smallest debt.

This will involve making additional payments to this debt. Before you know it, your smallest debt will be paid off. You will then put this money into the next smallest debt (that’s number 2 on your list) and so on. Continue this process until all your debts are paid. This is known as the snowball effect.

3. Automate your repayments

One of the easiest ways to keep your repayments on track is to set and forget.

All you need to do is set up the repayments for each debt to automatically debit from your account each month. Plus, don’t forget to set a little extra repayment for the smallest debt.

It’s a good idea to set this up soon after you get paid.

Why this method works

The method is called the ‘Snowball Effect’. The idea is that the satisfaction you get from paying off the first debt motivates you to pay off the next one. This is because each debt you pay off feels like a big achievement, inspiring you to keep going. It’s also much easier to focus on one thing (debt) at a time, so you’re unlikely to get overwhelmed and give up.

Footnotes
1. https://www.finder.com.au/press-release-jan-2020-7-2-million-aussies-will-nurse-a-new-year-financial-hangover
2. https://data.oecd.org/hha/household-debt.htm
3. https://www.finder.com.au/credit-cards/credit-card-statistics
4. https://download.asic.gov.au/media/5852803/rep672-published-16-november-2020-2.pdf

The information provided in this blog post is general in nature and does not constitute personal financial advice. It has been prepared without taking into account your personal objectives, financial situation or needs. Before making any decisions, it is important for you to consider your personal situation and seek appropriate tax, legal and other professional advice.

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This could be the secret to better budgeting

Credit Simple — Wed, 07 Oct 2020 01:09:13 +0000

If you’ve never had a budget, or if you’ve tried and given up on one before, it can be easy to get overwhelmed. Visions of complicated spreadsheets and living on nothing but 2 minute noodles make the idea seem at best, snore-inducing and at worst, overly restrictive. But the truth is it takes very little effort to get a basic system in place. This is great news, as it can mean the difference between major savings and none at all.

If you’re hesitant to set up a budget, or even if you have one now that’s only kind of working for you, here’s a solution that may just work: separating your money into ‘buckets’.

What is a money ‘bucket’?
This concept has been doing the rounds of the personal finance blogs and media for a while now, and it’s a simple one: instead of a complicated line-by-line budget that accounts for every cent, you simply split your income into a separate account – and automate transfers – for each category. That way, you automate your saving and spending so it becomes easy to save: it’s that simple.

Step 1: Track how you’re spending now
For a week, or better yet, a month, track your spending. Many banks in Australia and New Zealand also have this function built in to their online banking, categorising your transactions for you. However you choose to do it, you’ll soon see trends emerging, and you’re ready to move onto the next step.

Step 2: Choose your categories and decide how much goes in each
Once you have all your info, it’s time to come up with a few broad categories that reflect a realistic picture of how you want to spend and save. For example, you could have categories like rent or mortgage and bills, emergency savings, groceries, eating out, fun money, travel savings and debt. Less is definitely more – fewer categories makes for a simple budget that’s easy to stick to, making it easier to save. Once you’ve set your categories, decide what percentage of your income needs to go into each. Assuming you’re not spending more than you’re earning, this needn’t be vastly different from how you’re spending now.

Step 3: Open an account for each category
With a different account for each type of spending and saving, you’ll know exactly how much you have in each. Many financial institutions offer an option for multiple accounts linked together, and you can even give them customised names so you can see, at a glance, how much you have in each one.

Step 4: Set up your automatic transfers
As with many things in life, set and forget is the surest path to success. Make sure you set up direct debits for each of your categories so your money is moving where you need it without you needing to think about it. Many companies will let you split your salary this way, or you could have all your income go into one account to begin with, with regular transfers set up to move money between accounts automatically.

Step 5: Regular check-ins
Whether monthly or quarterly, it’s a good idea to check regularly to make sure each account is where it needs to be. That way, if you find one overflowing while another is almost empty, you’ll know it’s time to tweak your transfers to better match your spending and saving goals.

So what are you waiting for? It’s time to let your savings take care of themselves. see how automating your finances can help you save towards your dreams.

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Managing your finances when life throws you a curveball

Credit Simple — Fri, 24 Jan 2020 02:39:06 +0000

Occasionally life will throw you a curveball that directly or indirectly impacts your finances: you’re made redundant, your furnace dies or you’re expecting a child and you realise you’ll need to upgrade homes in the not-too-distant future.

The last thing you want is to dig yourself into a deeper hole because you weren’t able to manage the financial side of things.

Here are some ways to avoid that, so that you can bounce back sooner rather than later.

1. Put your spending on lockdown.

The first thing to do is to stop spending more than is necessary. Some of the easiest ways to do that without disrupting your lifestyle too much include:

Cancelling any unnecessary subscriptions. With so many online providers charging a subscription fee these days, there are bound to be some you can cancel or temporarily shut off. Keep the Netflix subscription if you love movies or the Spotify subscription if you love music, but nix the rest if you can.
Cutting back on the luxuries. Temporarily swapping a movie night in for a night at the cinema or swapping organic groceries for the non-organic kind can save you some money without disrupting your lifestyle too much.

2. Review your budget (or create one for the first time).

We’re big proponents of creating a budget so if you haven’t created one yet, now’s the time to get onto it.

Even if you already have a budget in place, now’s a good time to revisit it.

If there’s anything this situation can teach you, it’s that your financial situation doesn’t stay the same forever. Pull your budget back out for a re-review and see if there is anywhere else you can cut back.

3. Check your financial institutions’ financial hardships policies.

If you’re having a hard time making ends meet even after tightening your belt, you may want to reach out to your bank, lenders, utility companies and anyone else you owe money to.

They’ll often have financial hardship policies that will temporarily halt your payments or reduce them, so that you can continue to meet your obligations and avoid late fees and defaults. After all, the last thing you want to do is make a difficult situation worse by going even deeper into unnecessary debt.

4. Cash out your rewards points.

If you have any rewards programs like frequent flyer points or credit card rewards , you may have the option to convert your points to cash or use them like cash toward your next credit card payment.

Using points for cash usually doesn’t go as far as using them toward merchandise or flights, but it may be worth it if you need to “buy” yourself another month or two.

5. Make minimum payments where it makes sense.

When life throws you a financial curveball, it often makes sense to hang onto as much cash as possible so that you can pay any additional unexpected bills that crop up. For example, if your best friend (aka, your dog) has emergency surgery, you’ll probably want some cash handy for any unexpected prescriptions during the recovery phase.

That means it might make sense to reduce loan payments to the minimum due so that you don’t find yourself back to square one when yet another bill comes knocking.

6. Get help.

If you find that your financial situation is more than you can handle alone, there are organisations that can help, like National Debt Helpline or various state-based debt advice services. You can find a comprehensive list of these services here.

Stay strong

We all experience situations that test our finances at one time or another – often multiple times throughout our lives. The key is to take strong action to keep the financial hit from spiraling out of control.

And if you do find that such situations test your mettle a little too much, it’s never too late to start thinking about a curveball account (perhaps better known as an emergency fund). This is a savings account specifically set up to help you through times like this.

That way next time, it’ll be just that little bit easier.

The information in this blog post is general in nature and does not constitute personal financial or professional advice. It is not intended to address the circumstances of any particular individual. We do not guarantee the accuracy and completeness of the information and you should not rely on it. Before making any decisions, it is important for you to consider your personal situation, make independent enquiries and seek appropriate tax, legal and other professional advice.

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7 ways to save money this holiday season

Credit Simple — Wed, 11 Dec 2019 06:17:29 +0000

Here are a few tips to help you ring in the new decade with as little debt as possible.

1. Reconsider whom you need to shop for

At different points in our lives, it makes sense to shop for certain people and not for others. For example, when our nieces and nephews are young, gifts are appropriate but when they’re adults, maybe a heartfelt card is enough.

Go through your list and decide whom you really need to shop for and who can make do with a heartfelt holiday wish.

2. Set yourself a limit – and stick to it

Now that you know who you need to shop for, set yourself a budget based on what you can reasonably afford. Set aside one “money bucket” for gifts, remembering to factor in the cost of wrapping paper, tape, greeting cards and the like

Consider a separate money bucket for food, drinks and entertainment. This includes eating out, coffees, treats, parties, costumes and movie outings.

Once you have your budget, stick to it. The whole point is to spend only what you can afford to spend.

3. Consider what people actually need

It’s often the case that people don’t really need, or even want, new expensive gadgets in their lives. If you consider what each person really needs, you may uncover creative and inexpensive ways to fill their holidays with cheer.

Maybe you can surprise your nostalgic mother by transforming all your old childhood photos into a digital scrapbook, or give your achy partner a massage based on a technique you learned from YouTube.

4. Shop online

If you do end up with a few physical goods on your to-buy list, consider buying them online. Not only can you often find better deals, but you’re also less likely to incur unexpected or hidden expenses like petrol, parking, eating out, that special gift to yourself and all those pumpkin gingerbread lattes.

But online shops want your dough just as much as brick and mortar shops do, so make sure you don’t get sucked into all the online sales and marketing gimmicks.Make sure you shop around for the best deals and buy only what’s on your list.

5. Do a Secret Santa

Secret Santas aren’t just for the office and the school yard; they’re great for families too. So if you really want to save money this holiday season, and help others do the same, consider a great big Secret Santa.

Ask everyone to write down their name on a slip of paper, along with two or three items they need (or they can simply write “surprise me!”) and throw those into a hat. This way, everyone can save a little money and no one is left with a useless gift they’ll just toss later.

6. Go potluck

There’s nothing wrong with wanting to entertain guests at your home over Christmas or New Year’s Eve. However, there’s no reason to splurge on all the food yourself. If you decide to throw a party, go ahead and cook a couple of your specialty dishes, but ask all your guests to bring something too.

7. Spend New Years in

You don’t need us to tell you how expensive it can be to pay for food, drinks and cover charges just to attend a fancy New Year’s party. Why not hang some mistletoe at home and have your party there?

You won’t have to put up with obnoxious strangers and you won’t have to stand on milk crates to see the fireworks on your big screen and most importantly food and drinks will be a fraction of the price.

Eat, save and be merry!

With some foresight and a little self-control, you can get through these holidays without burying yourself into a pile of debt you’d otherwise spend the next year digging yourself out of.

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6 personal finance podcasts to change your money mindset

Credit Simple — Tue, 30 Apr 2019 23:18:08 +0000

Ready to change your money mindset? These fantastic money podcasts may be just the inspiration you need…

My millenial money
This Aussie podcast is perfect if you want to sort out your financial future but aren’t sure where to start. Join Glen James and John Pidgeon for a laidback discussion on heaps of financial themes particularly relevant to those in their 20s, from HECS debts to ‘rentvesting’.

So Money
In this daily podcast, financial expert Farnoosh Torabi interviews people from all walks of life about their finances and answers questions from listeners. Perfect for if you need a bit of inspo to start the journey towards your financial dreams.

Afford anything
This is a practical podcast for anyone who wants to improve their decision-making around money. Paula Pant interviews financial experts as she blogs her way to financial freedom, covering themes like financial independence, wealth creation, retiring early, and how to afford your big goals.

Planet Money
Focussed mostly on the US economy, NPR’s Planet Money tells stories that explain real-world economics in an entertaining and engaging way. Its genius lies in how it can make seemingly boring topics fascinating, diving deep into the money behind everyday things.

HerMoney
Financial editor of NBC’s ‘Today’ show, the best-selling author of 11 books, Jean Chatzky talks personal finance for women, covering the intersection between money and career, family, relationships and more.

The Tim Ferris Show
More of a business and self-improvement podcast, but with a big money focus, Ferris interviews top entrepreneurs to find out what makes them tick. Each episode, he chats with experts in their field to find the routines, habits and strategies that make them successful.

These are just a handful of our favourite financial podcasts, but there are plenty more podcasts (and blogs) out there that can help you take the first steps to financial freedom.

What are some of your favourites?

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7 money saving tips you can complete in 10 minutes each

Credit Simple — Tue, 23 Apr 2019 07:05:21 +0000

It can be all to easy to chuck anything money or finance related in the too-hard basket. But the truth is, spending a few minutes sorting out just one aspect of your finances can make a big difference.

If you’ve got 10 minutes to spare, complete one of these money saving tips and you could see instant financial results.

Empty your spare change into a jar
Then pop on the lid. Now every time you’ve got a few bits of shrapnel, chuck ‘em in. This is now your bonus money. Whenever the jar is full, you can either deposit it at the bank or use it to treat yourself.

Set up a high interest savings account
It’s probably been on your to-do list for a while, so pop open your laptop and set this up now. It doesn’t take long and there are heaps of added benefits – for example, some accounts have free overseas transactions (as long as you make regular monthly payments).

Make a grocery list
Check your cupboards and your fridge and then go through the week in your mind day by day to figure out what you need in your next shop. Obviously, this one only works if you shop to the list. Plus, if you only hit the supermarket once a week, you’ll make bonus savings.

Switch energy or insurance providers
New customers almost always get the best deal, so why not be one? Call up a rival electricity, gas or insurance provider, get a quote, and switch to them. Chances are, you’ll pay a lot less.

Set up your bills to come out automatically, or pay them early
Most energy providers give discounts for customers who pay early, or even just on time. You can take advantage of this by either setting up direct debits to come out early, or paying on time each month.

Pack your lunch for tomorrow
Whether you’re heading to work or just out for the day, a container of leftovers or a simple sandwich can save you up to $20 if you find yourself getting hangry when you’re away from home. Ditto for a byo water bottle and/or morning coffee-filled keep cup.

Sign up for a Spend tracker to track your spend
Most of the time, we engage in ‘mental accounting’ – we think we have a pretty good idea of where our money goes, but actually, the picture we have in our minds usually doesn’t match up with reality.

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How to enjoy a low-spend long weekend

Credit Simple — Wed, 17 Apr 2019 01:22:41 +0000

As the long weekend kicks off, it can be all too easy to fill your time with fun and frivolous spending. But before you know it, Monday night rolls around and your bank balance is looking more than a little depleted.

Luckily, it doesn’t take much to reset your default setting from ‘spend’ to ‘save’ for a few days, and the savings can be pretty significant. Read on for our tips to boost your savings in just a few days.

Skip 1 thing
You probably have a pretty good idea of which is your biggest discretionary spend. But what would happen if you skipped it, just for this weekend? It’s easier than you think.

For example, for many of us, a big money suck can be eating out. With 4 days off, you could find yourself eating out a couple of times a day and think nothing of it. With even your local cafe or Thai restaurant setting you back at least $20 a head. If you’re a couple or a family, you could save hundreds of dollars.

Only use cash
Studies show that when we use cash rather than cards, we feel the loss of money more. This is because cash is a physical, tangible thing you have to give away to pay, while credit and other payment methods feel hypothetical or even non-existent.

Switching to cash not only makes it easier for you to mentally track your spending, but if you take out a set amount at the beginning of the long weekend, it makes it much easier to stick to a budget.

Take the zero-spend challenge
This one’s a game changer. For a single day (or even the whole weekend if you feel like an epic savings challenge), don’t spend a single cent and see what happens.

As an added bonus, you’ll find that (as long as you have a well-stocked fridge and ready access to a car or public transport) that the possibility for free activities are almost limitless. Make your own coffee, go for a run, fire up netflix, have some friends round or chill in your local library. It can be a really fun experiment.

Apply the ‘clean slate’ principle
If you spent Friday-Sunday on a bit of a spree, that’s actually ok – studies show that at the beginning of a week, month or any time that feels like a ‘fresh start’ is the perfect time for habit change.

With that in mind, Monday or Tuesday may be the perfect time to set up a new budget or set and ambitious savings goal, especially after a few days of spendthrift-madness.

So go on, take the challenge – enjoy a low-spend long weekend. It could save you heaps!

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5 super fun (and frugal) school holiday hacks

Credit Simple — Fri, 12 Apr 2019 07:09:10 +0000

If the school holidays have you fearing those dreaded words, ‘I’m bored!’ but you know you don’t have cash to spare, never fear – a quick Credit Simple brainstorm is all you need.

Check out our top 5 tips to help you survive – and thrive – during these school holidays, with your budget and savings well and truly intact.

1. Get out and about – for free
Whether you’re planning a vacation or a staycation, the school holidays are the perfect time to get out and enjoy heaps of free and low-cost activities on offer. From kid-friendly museums and galleries, to parks, adventure playgrounds, libraries, national parks and even that ol’ favourite, the beach, you could easily fill a whole day (and ensure the kids are well and truly tuckered out) for the cost of a car trip or a bus ride and your byo sandwiches.

2. Try backyard camping
An old-school family holiday might not be in the budget this month, but there’s no reason you can’t drag the camping gear out of the garage, or borrow some from a mate, and have your own backyard camping adventure. This idea is perfect if you small kids who might not be used to being away from home – their beds are just metres away. There’s no stressful car ride required, and it’s a risk-free option that won’t be spoiled by bad weather.

3. Enjoy a crafternoon at home
This trendy pastime (a combo of the words ‘craft’ and ‘afternoon’) is not just for pinterest-obsessed twenty-somethings – in fact, it’s beyond kid-friendly. Especially if the arvo looks gloomy, a bit of craft can go down a treat with the young and young at heart. The best bit? There’s not much skills and very little money involved. Crafternoons can include painting, drawing, origami, The only limit is your imagination – google ‘crafternoon’ and you’ll see what I mean.

4. Have a movie marathon
Find me one kid that doesn’t love to veg out in front of their favourite movie or binge their fave tv show with a bowl of freshly-popped popcorn on the coffee table. Whether you fire up those streaming services or crack out the DVDs, each kid can pick their favourite movie or show for some much needed family chill time. If it all goes well, why not make it a regular event?

5. Go bush
Bushwalks are a brilliant way to explore the natural world on a budget. Just grab the sunscreen, insect repellent and plenty of water, load up the car with the bits ‘n bobs you need for a BBQ or picnic, and hit the road for an awesome family day out. Pro tip: make sure you let someone know where you’re going and when you plan to be back.

Hopefully these 5 cheap school holiday activity ideas get you thinking of even more fun, free idea to keep the kids occupied.

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