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Tip Store: Finances: Debt Reduction
Consider Babysitting
If your weekends are free, use Saturday night as a night to work. Your husband can mind your own children, so there's no added expense. Look around and see what professional babysitter's charge in your state to get an idea of what to charge. Spread the word of your services. Perhaps try placing a free ad on the shopping centre notice board, tennis or golf clubs or similar, or placing a note in the local kindy or local schools bulletins. Consider doing a letterbox drop in the local vicinity.
Contributed by Anne Heaven, 29th March 2018
Contributed by Anne Heaven, 29th March 2018
Declutter and Sell Off
It sounds like it's time for a declutter and sell-off! Gumtree listings are free, or you could hold a garage sale or stall at your nearest flea market.
Have a look around your home, including all shelves, drawers, cupboards etc, and identify things that haven't been used or worn recently. Find gifts that haven't been used since receiving them, books you've read and won't likely read again often (you can always borrow them from the library if you fancy reading them one or two more times). Clothes that are too big, small or don't fit quite right. Kitchen appliances that are seldom used or that you could quite easily complete the same task with something else you own. Consider selling items from your garage or shed that you rarely use and might be able to borrow from a friend or family member next time.
Your kids' stuff might be a gold mine - think about bundling clothes your 2.5 yr old has outgrown, and include anything that fit last season but won't fit by the time the next season rolls around. Go through the kids toys and books and find those that are a little too young for your children now - the babyish stuff. If you have any other baby gear your youngest has moved on from - cot, change table, pram, carrier, mobile etc sell those off too.
Be honest with yourself, be brutal. If in doubt, cull it - you can always replace it when your finances have recovered at roughly the same cost you sell it for if you buy second hand.
Contributed by Simone Dejun answered, 22nd March 2018
Have a look around your home, including all shelves, drawers, cupboards etc, and identify things that haven't been used or worn recently. Find gifts that haven't been used since receiving them, books you've read and won't likely read again often (you can always borrow them from the library if you fancy reading them one or two more times). Clothes that are too big, small or don't fit quite right. Kitchen appliances that are seldom used or that you could quite easily complete the same task with something else you own. Consider selling items from your garage or shed that you rarely use and might be able to borrow from a friend or family member next time.
Your kids' stuff might be a gold mine - think about bundling clothes your 2.5 yr old has outgrown, and include anything that fit last season but won't fit by the time the next season rolls around. Go through the kids toys and books and find those that are a little too young for your children now - the babyish stuff. If you have any other baby gear your youngest has moved on from - cot, change table, pram, carrier, mobile etc sell those off too.
Be honest with yourself, be brutal. If in doubt, cull it - you can always replace it when your finances have recovered at roughly the same cost you sell it for if you buy second hand.
Contributed by Simone Dejun answered, 22nd March 2018
Advertising Your Business for FREE
My friend has recently started her housekeeping business while she looks for a full time job. With very little funds she cannot spend money on newspaper ads, I suggested she join local community groups,/ buy swap sale groups and overnight she joined 42 of her local groups via Facebook, she posts her business online once a week and has been very successful In gaining clients, her audience is now in the hundreds and on her first day she was booked for two jobs!!! Now two weeks later she has put on hold her plans of looking for full time work as the housekeeping jobs provide her with flexibility and a near full time wage!!! All without spending a cent.
Contributed by K. Venn
Contributed by K. Venn
Budget Breakdown
Get your mum to do a fortnightly breakdown of all her expenses. The biggest impact we had by doing this was with our electricity provider. Our provider lets you make weekly, fortnightly or monthly direct debit payments. We opted for fortnightly and it makes paying bills more manageable. Yes it would be nice to have an extra $70 a fortnight to play with, but I'll be so much more satisfied by seeing a negative balance on our power bill! Also, I have a grocery budget for the two of us of $80 a week. I plan our meals ahead and make sure that meals I cook have enough to provide lunches for us the next day. I take my own coffee everywhere. The coffee brand I do buy is expensive (in comparison to other brands, it's 33 cents a serve and I buy a box of 28 coffee bags), but it saves me $3.20 a day at work. Doesn't sound like much, but it adds up to $832 a year, which in your mums case, is two car payments!
Contributed by Emily D., 7th November 2013
Contributed by Emily D., 7th November 2013
Don't Double-Up on Income Protection Insurance
If she has superannuation she should check that it doesn't already have income protection insurance. If she does she can get rid of that expense. Most supers offer it and it costs you nothing as they take their fee from the super fund (you will have slightly less super when you retire is all.) Ring the car loan place and see if they will negotiate the length of the loan term. They may extend it longer and that would reduce the payments for the short term even though she will be paying more interest. Contributed by Janine Benson, 7th November 2013
Get Sound Financial Advice to Deal with Debt
I think that mum could benefit from talking to a financial counsellor. Not knowing her location, off the top of my head, EACH (located in outer Eastern Melbourne) is funded by the Victorian government. Their financial counselling service is free to low income earners and Centrelink recipients living or working in the City of Maroondah, the City of Knox, Healesville, Yarra Junction and the surrounding areas. If mum is interstate, it may still be worth a call to EACH to ask if they know anyone interstate. The number is 1300 003 224 or www.each.com.au/financial-counselling/.
Contributed by Caroline Taylor, 7th November 2013
Website: www.each.com.au/financial-counselling
Contributed by Caroline Taylor, 7th November 2013
Website: www.each.com.au/financial-counselling
Don't Risk Bankruptcy Again
Paying 22% of an income towards a car (not including petrol, servicing, rego, etc.) is madness. As much as your mum is not going to want to hear this, she's got to sell that car and pay off the loan. Using a combination of public transport, walking, riding a bike, getting a lift with a friend or even taking taxis will be cheaper than spiralling back into the same debt problems that saw her go bankrupt. Only after having saved up for a vehicle that is small and cheap (around $2,000) can she buy a car. Contributed by Nick Haggarty, 7th November 2013
Do You Really Need a Brand New Car?
Did your Mum buy a brand new car? Did she need a 'new' one or would an older car have done the job? I would suggest she sells the car and buys a second hand one much cheaper, say 3-5 years old. Cars lose value so quickly, even if she loses some money on selling, she will be better off in the long run financially. We saved $20,000 by buying a 2010 model Kia Carnival as opposed to a 2013 which was double the price!
Contributed by Miranda Vonk, 7th November 2013
Contributed by Miranda Vonk, 7th November 2013
Every Cent Counts
Every day I empty my purse of silver and gold coins and put them in a small lunch box. I have found that the coins accumulate quickly and when I have saved either $20 or even $50 I immediately put that saving onto my credit card. I have been able to pay my credit card with these savings and watch my credit card balance reduce quickly. Give it a go you will be surprised at how much you can save with coins.
Contributed by Esther Simioni, 28th April 2013
Contributed by Esther Simioni, 28th April 2013
Debt Reduction is in the Detail
Approximate $ Savings: Endless $
All you need is 10 minutes and a good cuppa, good reading light and a comfortable chair and you're there ... I'm talking about scrutinizing you bank statements, including your credit card statement, regularly without fail. This is a friendly reminder about how important it is to know your own spending history. You are in charge and responsible to read your statements in detail and watch for errors (or worse) in your statements. A few years ago I had the horror of experiencing card fraud but I jumped on it 'toot sweet' as I practiced this tip vigilantly without fail. My bank was fantastic and extremely reassuring. In that instance it saved me over $5,000 in small fraudulent transactions that would have normally gone unnoticed as I operated my small home based business. I'll always follow this tip. It works.
Contributed by Rose Yanz, 11th September 2012
All you need is 10 minutes and a good cuppa, good reading light and a comfortable chair and you're there ... I'm talking about scrutinizing you bank statements, including your credit card statement, regularly without fail. This is a friendly reminder about how important it is to know your own spending history. You are in charge and responsible to read your statements in detail and watch for errors (or worse) in your statements. A few years ago I had the horror of experiencing card fraud but I jumped on it 'toot sweet' as I practiced this tip vigilantly without fail. My bank was fantastic and extremely reassuring. In that instance it saved me over $5,000 in small fraudulent transactions that would have normally gone unnoticed as I operated my small home based business. I'll always follow this tip. It works.
Contributed by Rose Yanz, 11th September 2012
Fortnightly Payments Slash Loan Time
When we set up our car loan contract (60 month contract) we elected fortnightly payments because this suited our pay schedule better. We are now at year 3.5 of the contract and I called to find out how much was still owing. Imagine my glee when I discovered that we only have 4 months left to go instead of the 18 months I was expecting! Even better, we have saved approximately $3,500 in interest, all this without any extra effort on our part, simply by paying fortnightly, which results in 13 monthly payments being made a year instead of 12. I was so encouraged I called to find out about the other car loan, to find we are approx $1,200 ahead on that one as well, 2 years in, and will also pay this out substantially early. I was stunned by just how much difference this has made.
Contributed by Sylvia Westerik, 3rd February 2011
Contributed by Sylvia Westerik, 3rd February 2011
Paying the Credit Card off With a Money Tin
I buy a large money tin from the cheap stores for $3 and every time I have been shopping I put some coins in. Every three months I take this to the bank to pay my credit card. I don't miss the $1 and $2 as much as paying off a larger sum of money.
Contributed by Sonya Jaffar, 14th August 2010
Contributed by Sonya Jaffar, 14th August 2010
Using the Credit Card to Get Out of Debt
Approximate $ Savings: $3,956
When it came to paying the credit card bill, my husband would pay only the minimum, and the interest added up over the year. I took over paying the credit card bill and I put all our pay on the credit card. That gave me some room on the card to use to buy that weeks petrol and food. The next week I put all the pay on the credit card and paid a bill as well as the living costs on the credit card. I was very careful not to spend a lot, only what we needed. Two years of putting more than I used each month on the credit card I had paid it off. That saved me $1,956 a year in interest. Now I can pay the closing balance, this way there is no interest to pay. The points they pay me I use to pay for petrol which means I do not have to budget for petrol that month, more saving for a night out.
Contributed by Deborah Ward, 16th July 2010
When it came to paying the credit card bill, my husband would pay only the minimum, and the interest added up over the year. I took over paying the credit card bill and I put all our pay on the credit card. That gave me some room on the card to use to buy that weeks petrol and food. The next week I put all the pay on the credit card and paid a bill as well as the living costs on the credit card. I was very careful not to spend a lot, only what we needed. Two years of putting more than I used each month on the credit card I had paid it off. That saved me $1,956 a year in interest. Now I can pay the closing balance, this way there is no interest to pay. The points they pay me I use to pay for petrol which means I do not have to budget for petrol that month, more saving for a night out.
Contributed by Deborah Ward, 16th July 2010
Every Little Bit Helps
Approximate $ Savings: $100 -$1000/year
I keep a table of all our future bills and expected expenses. I then keep a close watch of our bank account to ensure we always have adequate funds in our account to pay the bills. I would hate paying money to the bank for over drawing. This is all very easy via the Internet. Then, whenever I can see that we have extra dollars in our account, which these days earns little or no interest, I transfer the money to our mortgage. Anything from $10 to $1000, every little bit helps. So whilst the economy is full of doom and gloom we are making the most of getting ahead on our mortgage repayments while the interest rates are so low. It is really easy to make a difference. I also know that if an unexpected expense arises I can transfer money back from our 'redraw' account in a matter of days. So far I haven't had to, and once the money is out of our everyday account there is no temptation to spend it. Contributed by Leisa, Wauchope, 3rd June 2009
I keep a table of all our future bills and expected expenses. I then keep a close watch of our bank account to ensure we always have adequate funds in our account to pay the bills. I would hate paying money to the bank for over drawing. This is all very easy via the Internet. Then, whenever I can see that we have extra dollars in our account, which these days earns little or no interest, I transfer the money to our mortgage. Anything from $10 to $1000, every little bit helps. So whilst the economy is full of doom and gloom we are making the most of getting ahead on our mortgage repayments while the interest rates are so low. It is really easy to make a difference. I also know that if an unexpected expense arises I can transfer money back from our 'redraw' account in a matter of days. So far I haven't had to, and once the money is out of our everyday account there is no temptation to spend it. Contributed by Leisa, Wauchope, 3rd June 2009
Card Eating ATM Causes Epiphany
Approximate $ Savings: $5,000 per year
At our lowest point financially I recently ran up to a local ATM to get some money out only to realise I didn't have enough in our account. I then resorted to my credit card (thinking doesn't matter, I will fix it up later... I have done it plenty of times) only to put my pin number in wrong three times. The card was eaten by the ATM there and then! Panic set in. I had no cash! I rang the credit card company only to realise I had to fax this, that and the other, it could take up to ten working days etc. Once the panic had subsided I realised I was only two days away from pay day and bugger it who cares if I can't use that card anyway! So I have not faxed anything, I have just realised I don't need it and now I have been transferring as little as $5 left over from my pay day each week onto the credit card. This card may take time to pay off but at least I know I can no longer to any damage with it financially. I am actually looking forward to paying this money sucker off!
Contributed by Jessica, Ringwood, 3rd June 2009
At our lowest point financially I recently ran up to a local ATM to get some money out only to realise I didn't have enough in our account. I then resorted to my credit card (thinking doesn't matter, I will fix it up later... I have done it plenty of times) only to put my pin number in wrong three times. The card was eaten by the ATM there and then! Panic set in. I had no cash! I rang the credit card company only to realise I had to fax this, that and the other, it could take up to ten working days etc. Once the panic had subsided I realised I was only two days away from pay day and bugger it who cares if I can't use that card anyway! So I have not faxed anything, I have just realised I don't need it and now I have been transferring as little as $5 left over from my pay day each week onto the credit card. This card may take time to pay off but at least I know I can no longer to any damage with it financially. I am actually looking forward to paying this money sucker off!
Contributed by Jessica, Ringwood, 3rd June 2009
Credit Card with a Low Interest Rate for the Balance of the Transfer
My husband and I due to a failed business venture accumulated large credit card debt with a few cards that had interest rates of 12% or more. Of course, you pay the minimum per month, but with the interest charged, we weren't seeing the balance going down much so we found that Citibank and CUA both have credit cards that offer 4.9% for the life of the balance transfer. Citibank's yearly fee is much higher, however, we have saved thousands of dollars in interest by paying the minimum. The only thing is that the interest rate on the cards is high if you purchase anything new. We only pay the transferred amount and do not touch the account at all knowing how high the interest rate is to use it. We are simply paying off the debt quicker and it has saved years and $$$ off what we would have paid if we were still paying the higher interest rate.
Contributed by Lisa, Colyton, 1st May 2009
Contributed by Lisa, Colyton, 1st May 2009
Beat the Banks at Their Own Game
Approximate $ Savings: All the interest on credit cards
When trying to pay off your credit card debt, take advantage of the bank's "interest free period". Many banks offer 0% interest on balance transfers for the first 6 or 12 months. Once that period is up, simply do another balance transfer to another "interest free" card. This way, all of your hard earned money goes directly to pay off your debt, without giving the banks any interest. Just make sure you reduce the limit when you change cards to reduce the temptation to spend!
Contributed by Natalie, Cranbourne North, 29th December 2008
When trying to pay off your credit card debt, take advantage of the bank's "interest free period". Many banks offer 0% interest on balance transfers for the first 6 or 12 months. Once that period is up, simply do another balance transfer to another "interest free" card. This way, all of your hard earned money goes directly to pay off your debt, without giving the banks any interest. Just make sure you reduce the limit when you change cards to reduce the temptation to spend!
Contributed by Natalie, Cranbourne North, 29th December 2008
Paying Off Your Credit Cards
Go to www.schreditcard.com and find out how to reduce the interest you pay on your credit card and get rid of your credit card debt. I have followed the instructions and it works.
Contributed by Lynette, Endeavour Hills, 7th January 2009
Website: www.schreditcard.com
Contributed by Lynette, Endeavour Hills, 7th January 2009
Website: www.schreditcard.com
Best Ever Trick for Paying Off the Credit Card
The best trick I ever came across to assist paying off my credit card account was to leave my credit card at home in not so obvious place. That way you need to really think whether it was worth going home and more so worth going out again specially to make that unplanned purchase.
Contributed by Michelle Popplewell, 8th January 2009
Contributed by Michelle Popplewell, 8th January 2009
Start With Credit Card Debt
If you have credit card debt - this is a great place to start. It is usually charging you high interest for nothing in return. Check your interest rate on your current credit card, then do your research on the credit card comparison websites to find the lowest balance transfer rate on a credit card, heaps of banks offer 0% on balance transfers for six months to lure new customers. Set yourself six months to pay off the debt if that's achievable, or if its a larger debt and might take twelve months look for the cards that offer very low balance transfer rates over twelve months like one - two percent. I would make clearing your credit card debt a priority over a Peace of Mind Account. No point in saving up money to fall back on if you have a credit card that will take those savings away in interest each month and paying nothing off the balance. Do check however what the rate will be once the introductory period is over if, worst case scenario, you haven't paid the debt off at the end of the six - twelve months and don't use that card for any other purchases whilst you have an outstanding balance on it. Next I would make out a list of what your bills are each month and look and what you can go without, its easy to live lean when you really have to, the trick is to want to. Also look at consolidating where you can, for example, your insurance company will offer discounts if you have a few policies with them. After this I would start searching through the Tip Store, you should find heaps of tips in here that will give you ideas on where you can save money, you can then apply these savings towards getting that credit card paid off. Once you get the hang using the internet to research better deals, apply it to all the financial outlays you have and may be considering signing up for such as mortgages, car loans, personal loans. I also found a free chat with a mortgage broker revealed a much better way to manage my mortgage and helped me save loads of cash.
Contributed by Melissa, Ormeau, 26th April 2010
Contributed by Melissa, Ormeau, 26th April 2010
Saving Childcare Fees
Approximate $ Savings: $10,140
We have been paying childcare fees for the last three years since going back to work. As our wages went up so did our fees. Last year we were paying $195 a week for full time childcare for my youngest child but this year he starts school so we no longer will need this service. Rather than thinking we now have another $195 to spend each week, I'm continuing to transfer this money to an Internet account (which has no fees). We will save $10,140 over the next year. If we could get through without $195 a week last year, we can do it again this year! That'll be $10,140 off my mortgage next year! Woo hoo!!!! Contributed by Yvette, Roxburgh Park, 9th January 2010
We have been paying childcare fees for the last three years since going back to work. As our wages went up so did our fees. Last year we were paying $195 a week for full time childcare for my youngest child but this year he starts school so we no longer will need this service. Rather than thinking we now have another $195 to spend each week, I'm continuing to transfer this money to an Internet account (which has no fees). We will save $10,140 over the next year. If we could get through without $195 a week last year, we can do it again this year! That'll be $10,140 off my mortgage next year! Woo hoo!!!! Contributed by Yvette, Roxburgh Park, 9th January 2010
Paying Off the Mortgage While Saving for Wants
Approximate $ Savings: $200 -$1,000/month depending on loan amount
I have a home loan which I am paying off myself, I do not have a high paying Job. My tip is when I am saving for something I "label "the money I save each week for a particular item e.g.: at the moment I am saving for a car, holiday and house renovations. Each week money from my pay is transferred automatically into my home loan account labelled car, holiday, reno. This reduces the principle of my home loan for the duration I am saving and reduces the interest as well. When I am finally ready to redraw the money for my saved item the principle is lower than it would have been if I had saved in a different way. I have reduced my home loan from 110K to 52K in 8 years using this method and I still go on holidays, can lend money to family and this repaid money goes into my loan account with its own label. When it comes to owning my own home I feel that I can have my cake and eat it too.
Contributed by Bridgitte, Virginia, 19th December 2009
I have a home loan which I am paying off myself, I do not have a high paying Job. My tip is when I am saving for something I "label "the money I save each week for a particular item e.g.: at the moment I am saving for a car, holiday and house renovations. Each week money from my pay is transferred automatically into my home loan account labelled car, holiday, reno. This reduces the principle of my home loan for the duration I am saving and reduces the interest as well. When I am finally ready to redraw the money for my saved item the principle is lower than it would have been if I had saved in a different way. I have reduced my home loan from 110K to 52K in 8 years using this method and I still go on holidays, can lend money to family and this repaid money goes into my loan account with its own label. When it comes to owning my own home I feel that I can have my cake and eat it too.
Contributed by Bridgitte, Virginia, 19th December 2009
Chipping Away at the Debt by Eliminating Excess
Approximate $ Savings: $840 a year
I used to have pay TV, but decided to get rid of it as we weren't getting value for our money.. we were paying $50 or so a month, when I got rid of it rather than the money getting 'frittered' away with nothing to show for it (as I knew would happen) I decided to put that $50 that WAS being direct debited for pay TV and make a direct debit to my scarily "close to the HUGE limit" credit card. Instead of now frittering the money away, or keeping something I didn't feel was worth it we are now slowly chipping away at the debt we have and over 1 year can reduce my credit card debt by an extra $600. I will also be comparing Internet providers once my current contract is up and get the best price possible and do the same with the difference in price that I would be saving, which I think will be around $20 a month at least by looking at current prices - another $240 a year I can chip off my credit card. So in total at least $840 extra taken off my credit card a year, and all because I am getting rid of or swapping from excess payments that aren't necessary.
Contributed by Elissa, Noarlunga Downs, 11th October 2009
I used to have pay TV, but decided to get rid of it as we weren't getting value for our money.. we were paying $50 or so a month, when I got rid of it rather than the money getting 'frittered' away with nothing to show for it (as I knew would happen) I decided to put that $50 that WAS being direct debited for pay TV and make a direct debit to my scarily "close to the HUGE limit" credit card. Instead of now frittering the money away, or keeping something I didn't feel was worth it we are now slowly chipping away at the debt we have and over 1 year can reduce my credit card debt by an extra $600. I will also be comparing Internet providers once my current contract is up and get the best price possible and do the same with the difference in price that I would be saving, which I think will be around $20 a month at least by looking at current prices - another $240 a year I can chip off my credit card. So in total at least $840 extra taken off my credit card a year, and all because I am getting rid of or swapping from excess payments that aren't necessary.
Contributed by Elissa, Noarlunga Downs, 11th October 2009
Realistic Goals and Good Money Management Equals Fast Debt Reduction
Approximate $ Savings: $1000s+
On the first of every month I calculate what our total debts are and more importantly how much we have reduced it by that month. I then write the total still owing on the calendar so that it is in my eye line all the time. Like many people we are on a single, barely average income and a third of which is overtime, which in winter is often minimal. My job as homemaker is to make the wages stretch as far as possible so we can repay debt as fast as possible. I set goals regularly but make them realistic - e.g. to repay an extra $50 a week in winter, $75 in Spring and Autumn and $100 in Summer (when the wages are at their highest). This focuses our minds and makes us really think about spending any money - i.e. do we really need the item? Following these simple ideas has helped us have a mortgage free home and two rental properties, both of which will be paid off within the next 10 years when we will be in our early 40's (me) late 40's (Hubby).We will save over $100k in interest during this time and then not be so reliant on employers for our income. I just thought I would share this as inspiration for others. (We have two school age children too).
Contributed by Rachel, Dunedin, 7th August 2009
On the first of every month I calculate what our total debts are and more importantly how much we have reduced it by that month. I then write the total still owing on the calendar so that it is in my eye line all the time. Like many people we are on a single, barely average income and a third of which is overtime, which in winter is often minimal. My job as homemaker is to make the wages stretch as far as possible so we can repay debt as fast as possible. I set goals regularly but make them realistic - e.g. to repay an extra $50 a week in winter, $75 in Spring and Autumn and $100 in Summer (when the wages are at their highest). This focuses our minds and makes us really think about spending any money - i.e. do we really need the item? Following these simple ideas has helped us have a mortgage free home and two rental properties, both of which will be paid off within the next 10 years when we will be in our early 40's (me) late 40's (Hubby).We will save over $100k in interest during this time and then not be so reliant on employers for our income. I just thought I would share this as inspiration for others. (We have two school age children too).
Contributed by Rachel, Dunedin, 7th August 2009
The Real Cost of Mindless Spending
I worked out using an online mortgage calculator (available with most banks) just how much mindless spending was costing. I put into that calculator my mortgage amounts etc and then I put in just $1.00 as a one off lump sum payment. After 1 year it saved me $3.52 in interest! So that in effect meant every $1.00 I spent equalled $3.52 in real terms. Therefore making a $60.00 purchase (e.g.: deep fryer) equals to the amount of $211.20 (actual "real" cost). It will make you think twice about spending again. Here is a link to a good mortgage calculator: www.bendigobank.com.au I hope this helps. Contributed by Karin, Berwick, 27th July 2009
Using Flybuys Credits to Pay Off Debt
I have had Flybuys linked to my NAB credit card for years now. I purchase everything I can using my credit card (staying in the budget) and then pay off my credit card at the end of the week, so I have no interest. I gain points from Flybuys for everything I buy. The Flybuy points that I accumulate I then redeem as credit to my NAB account helping to pay off my bills.
Contributed by Debbie, Broadwater, 10th November 2008
Contributed by Debbie, Broadwater, 10th November 2008
Control the Credit Card and Reduce Debt
Approximate $ Savings: $1000 and more a month!
We opted for our wages to directly go into our mortgage and live on credit. In theory this works if you can control the credit card so we reduced our credit card limit to $500 from $3000 and have saved bucket loads since. We now control our credit card instead of it controlling us! We save on interest because we pay it off every week. We no longer have room on the card for impulse buys We save for bigger purchases the old fashioned way instead of using the credit card which makes us think if we really need or want the item We purchase what we need for the week because all expenses come out of the same card e.g Daycare, health fund, food bill, petrol, bills etc. We are now very conscious of our power, phone and grocery bill totals and how to reduce them. What an incredible feeling to finally be in control of our money and see our home loan reducing!!
Contributed by Belinda, Greens Creek, 10th August 2008
We opted for our wages to directly go into our mortgage and live on credit. In theory this works if you can control the credit card so we reduced our credit card limit to $500 from $3000 and have saved bucket loads since. We now control our credit card instead of it controlling us! We save on interest because we pay it off every week. We no longer have room on the card for impulse buys We save for bigger purchases the old fashioned way instead of using the credit card which makes us think if we really need or want the item We purchase what we need for the week because all expenses come out of the same card e.g Daycare, health fund, food bill, petrol, bills etc. We are now very conscious of our power, phone and grocery bill totals and how to reduce them. What an incredible feeling to finally be in control of our money and see our home loan reducing!!
Contributed by Belinda, Greens Creek, 10th August 2008
Haggle for Cheaper Interest Rates
Approximate $ Savings: $100's - $1,000's
I still can't believe how easy it is to "haggle" for cheaper interest rates. I recently borrowed $300,000 to purchase a second property. On a single income with monthly commitments of around $200 (already), every cent I can save on interest is a bonus. When negotiating the mortgage, I was astounded how quickly each lending institution was prepared to reduce and in some instances remove establishment and associated fees and match or better the interest rate on the loan. With the level of debt relationship I have with the bank, I am not charged any bank fees on new or existing accounts and/or loans. I opened an additional account, with a free cheque book with them too. I like cheques. I encountered the same flexibility when searching for a better credit card deal. As the first $700 per week of my salary is now spoken for, I retained a credit card for "rainy days". Following a little research - mostly Internet - and discussions with two banks, my mortgage lender agreed to an amazing deal on a low interest credit card for me. All I had to do was list the features I was seeking and identify who else was offering these features. In less than five minutes I had an incredible credit card deal, which is lucky as my washing machine died a few days later! The interest rate is not much more than my mortgage! So, my tip: spend 20 minutes surfing the net. Make a list of "demands" then get on the phone OR go into your local branch and discuss your needs. As with any haggle, you must have a Plan B and be prepared to walk away. No bank wants to lose your business, even if you only hold a credit card with them.
Contributed by Simone, 12th August 2008
I still can't believe how easy it is to "haggle" for cheaper interest rates. I recently borrowed $300,000 to purchase a second property. On a single income with monthly commitments of around $200 (already), every cent I can save on interest is a bonus. When negotiating the mortgage, I was astounded how quickly each lending institution was prepared to reduce and in some instances remove establishment and associated fees and match or better the interest rate on the loan. With the level of debt relationship I have with the bank, I am not charged any bank fees on new or existing accounts and/or loans. I opened an additional account, with a free cheque book with them too. I like cheques. I encountered the same flexibility when searching for a better credit card deal. As the first $700 per week of my salary is now spoken for, I retained a credit card for "rainy days". Following a little research - mostly Internet - and discussions with two banks, my mortgage lender agreed to an amazing deal on a low interest credit card for me. All I had to do was list the features I was seeking and identify who else was offering these features. In less than five minutes I had an incredible credit card deal, which is lucky as my washing machine died a few days later! The interest rate is not much more than my mortgage! So, my tip: spend 20 minutes surfing the net. Make a list of "demands" then get on the phone OR go into your local branch and discuss your needs. As with any haggle, you must have a Plan B and be prepared to walk away. No bank wants to lose your business, even if you only hold a credit card with them.
Contributed by Simone, 12th August 2008
Cash Advance Clears Debt, Saves Interest
I receive family payments for my children and each year you can request to have an advance payment on your money(around $500), this is then paid back over about 6 months with fortnightly payments to Centrelink. I request this payment and pay off any bill I can that has an interest rate, by doing this I have saved hundreds of dollars on interest rates over the last couple of years!
Contributed by Kay, Christies Beach, 16th August 2008
Contributed by Kay, Christies Beach, 16th August 2008
Transfer to 0% Interest Helping to Slash Credit Card Bill
I have recently transferred the balance of one credit card to a new credit card giving no interest on balance transfers for 6 months. I have paid over $1500 in the past 3 months with no interest payments. Before half would have gone on interest, leaving only the other half, in this case $750, to go off the balance on the card. No purchases have been made on this card otherwise interest is accrued again. This has dropped my credit card balance dramatically and stopped me spending on my credit card too. A great money saver if you can stick to it. Most banks offer 0% balance transfers on new credit cards (hoping you will spend on the card).
Contributed by Peita, Hurstville, 25th June 2008
Contributed by Peita, Hurstville, 25th June 2008
How to Get Out of Debt and On Your Feet
I got myself into tremendous debt after leaving my children's father and then making a lot of bad decisions, so these are the things I have learned: For a better mortgage, speak to an independent broker. Ask them how many businesses they sell for (the more the better) and then ask if they are paid the same retainer no matter who the mortgage is - this way you KNOW you will get unbiased advice. Ask them if you can redraw any equity from your loan to repay current debts. Ask them if you can consolidate your personal loan, your credit card, etc. All of these reduce your overall repayments and take the heat off you in the here and now. If you have debts, don't put spare money into piggy banks, tins, under the bed etc. Start by speaking to the people you owe money to. Be HONEST and explain your situation without getting upset (if you can). Tell them up front that you would like to arrange a payment plan. It is in their interest to help you, so that they get some money from you. Ask each and every one of them for the smallest repayment amount they will accept. Then ask if you can make it $5 or $10 less because things are very difficult. Most of them will say yes. If you make this arrangement stick to it. Set your Internet banking up to deduct it automatically each week, or ask your bank to do it for you. If you have a debt collection agency chasing you, ask them whether they can make a letter of offer on the amount (this means, you offer to pay a lump sum, and they wipe a quarter to a half of the debt). Only do this if you can afford the money and don't use a credit card to do it. Each week when you get paid, take out what you need for groceries and essentials. Set aside a week's worth of bill money (work out your quarterly bills and divide by 13, or your monthly bills divided by 4). Don't forget to include insurance, car registration, and so on. Take out enough to fill up your car for the week. Anything left over, put it straight onto the bill that costs the most in interest. Usually that's your credit card. If you think you have no spare money at all, then put $5. Make the effort - that five dollars could save you $100 over the course of a year. If you have more than one credit card, pay the minimum on all of them and then put any spare dollars into just the one with the smallest balance - this is important for your self esteem because you will see yourself tackling that bill and you will feel very proud when that first card is gone. Destroy any cards that you cannot control. Cut them diagonally and mail them back to the bank. Ask the bank if you can switch it to a debit card with a VISA facility. That way, you can't spend anyone else's money.
Contributed by Shannon, 24th November 2005
Contributed by Shannon, 24th November 2005
Ask Creditors for Lower Rates
Like everybody at the moment interest rates are hitting our household quite hard so I thought I would contact our bank to see what we could work out, thinking about whether to fix the rate or not etc. I half jokingly asked them if they could lower our interest rate and low and behold they said yes. This is due to the size of our loan ($280k), we have only been with them for 2 years. You will never know if you don't ask. You are better to be upfront with your lender and let them know what is going on and try to sort something out. I apply this rule to all our creditors to prevent the collection letters rolling in and additional fees being added.
Contributed by Samantha, Cranbourne East, 19th March 2008
Contributed by Samantha, Cranbourne East, 19th March 2008
Save Thousands and Years on Interest Rates and Live Debt Free Sooner
Instead of paying extra money on your bigger home loan and minimum on smaller bills. Simply reverse this and pay minimum payment on your home loan and other large bills and extra on the smallest bill first, then when that bill is paid off you put all of that money onto the next smallest bill and so on. Takes some control over your budget but you can normally have even your home loan paid off in full within 8 years with no more bills Eg Home loan, personal loan, credit card, car loan. If credit card is the smallest bill then you pay this off first with as much extra as you can while you are paying the minimum on all the others. Once this is paid off you then pay off the next smallest bill with minimum plus the money you used to put into the credit card and so on. Hope this helps.
Contributed by Ron, Launceston, March 11th 2005
Contributed by Ron, Launceston, March 11th 2005
Make Money Selling Unused Household Items - Newcastle, Hunter & Central Coast NSW
I use a newspaper called the Local Trader to advertise all of my household items that I no longer need. I write a list of items with a description, phone through the ads and wait for the calls. Every two weeks I re-new the ads, make slight changes or completely change the wording (or reduce the price). The best thing about this paper is that it is free to advertise. So far I have sold over $1500 worth of things that were just lying around my house. Beats paying commission to a third party!
Contributed by Lee-Anne, New Lambton, July 19th 2006
Contributed by Lee-Anne, New Lambton, July 19th 2006