$2.3 billion dollars.
That’s how much the Australian Retailers Association expects that we spent as a country on Boxing Day alone in 2016. The message is clear – when it comes to the holidays, we’re pretty fast and loose with our cash.
But as we return to work and start getting rid of the Christmas BBQ weight, it’s worth thinking about the financial workouts you can do too. According to the Australian Securities and Investments Commission (ASIC), 40 per cent of us paid for Christmas with either lay-by, borrowing from friends and family, or with credit cards.
Now’s a great time to start attacking that debt before it becomes a bigger problem – but how can you get started?
Tackle everything quickly
While heading to the gym and working on physical fitness is something that can’t necessarily be rushed, your debts are different. If you pay more than you need to each week, fortnight or month you will be reducing the overall interest you pay, and reaching your goal tangibly quicker.
Miles Larbey, senior executive leader for ASIC’s MoneySmart notes that if you rack up $2,000 in debt, with minimum repayments you can end up taking 12 years to pay it off – with another $2,000 in interest alone. Get ahead of the curve and tackle your Christmas debts as quickly as possible for the best results.
Get a credit report when you’re done
As ASIC points out, you can claim one free credit report every year. Once you think you’ve cleared all of your Christmas debts, it might be a good idea to get yours. It will tell you about any outstanding payments or debts, and give you an indication of your standing when you want to take out a mortgage.
If you default on debt, it can remain on your credit report for five years.
For example – if you default on debt, it can remain on your credit report for five years, impacting your ability to move into debt in the future. It’s a wise plan to make sure there’s nothing that you forgot about.
This is an important step before you commit to your longer-term financial planning. For any help putting together your finances, get in touch with the team at Invest Blue. We’ll help you get back in shape, no matter how financially gluttonous your Christmas was.
What you need to know
This information is provided by Invest Blue Pty Ltd (ABN 91 100 874 744). The information contained in this article is of general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice with regards to those matters and seek personal financial, tax and/or legal advice prior to acting on this information. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relations to products and services provided to you.
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