MyCRA Specialist Credit Repair Lawyers

Tag: saving money

  • The Top 5 Reasons You’re Still In Debt

    debtToday we feature a Savingsguide.com.au Australia article on the hang-ups you might have with money that could be stopping you from recovering from debt issues.

    This article is posted in its entirety in aid of our ‘Make Credit Work For You’ section, helping you to stay credit savvy, and giving you the best chance to prevent credit rating defaults and have your credit file looking its best.

    By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repair and www.fixmybadcredit.com.au.

    Below is Savingguide’s article about why it is you might still be in debt:

    The Top 5 Reasons You Are Still In Debt

    By Alex Wilson, Savingsguide.com.au

    Have you ever wondered why it is you are always in debt? I have. It’s much like trying to lose weight, you always find yourself secretly knowing what you are doing wrong but never wanting to admit it.

    This is what led me to start thinking about some of the reasons we as consumers remain in constant debt. While we probably know that we are doing these things, it’s not until someone calls us up on it that we realise we need to fix it.

    So here are the top 5 reasons that you continue to have a credit card debt, personal debt or any other kind of debt.

    Tell me if you agree or not at the end as I would love to know your thoughts on this.

     

    5. You earn X per day, but spend Y

    I did the simplest thing the other day. I got my monthly salary, divided it by the number of working days in the month and found out how much money I make, on a daily basis, after tax.

    What astounded me was that it wasn’t a whole heap when you factor in that each day I buy train tickets, coffees, food and the odd magazine or gift.

    One of the biggest reasons we as consumers remain in debt is that we end up living to work, instead of working to live. Do you really want to spend all that money on a work day when it’s bit by bit taking away from your daily earnings?

    Do the math – figure out your daily rate and then do a rough calculation of how much you spend on any given day. It’s scary.

     

    4. You focus on what you want, not what you have

    Another reason you are still in debt is that you forever focus on the things you want, not the things you already have.

    Stop desiring over clothes, cars, fast food and other easy ways to spend. Start focusing on the clothes you already have, the car you already own and the food you already have in the cupboard.

    Consider reading about how to stop buying stuff to solve problems – it might give you some ideas on how to make do or assess whether you really need something.

     

    3. You swipe credit, delaying your rational thinking

    Swiping a credit card obviously puts you in debt. Another thing it does is disconnect you from the reality of your finances. Money becomes a play thing.

    Try and reconnect with your money, use only cash for a while. It gives you a better sense of what you are spending. Parting with a $50 note is much harder than swiping a card.

    This mentality of delaying your rational money saving thinking is partly to blame for why you remain in debt. Always opt for cash where possible.

     

    2. You have no clue about expenses, their amount and their due date

    You know you pay the mortgage, phone bill, Foxtel bill and more – though you don’t really know how much they all cost as a whole.

    Yes the phone bill is only $29, but when you add it onto the list of other expenses that recur every month, it quickly gets out of control.

    Learn the total of your expenses by setting up a direct debit account that is solely for recurring expenses. After a month or so you will quickly see the stand alone expense transactions and it will help you calculate what you pay on any given month.

    From there, open up your work PC or home PC and make a calendar in Outlook or Google Calendar. Make recurring appointments on the days these debits come out of your account. This means you will always know in advance what expenses you have coming up.

    I even set mine to alert me on my phone 24 hours before they are due. It keeps me in charge of my expenses and fully understanding of just how much I am spending.

     

    1. You have no budget and no focus on repaying debt

    Another reason you remain in debt is because you are not proactive enough. Having a budget is one thing, but what you really need is a budget that focuses on finding spending leaks that can be repaired and used to fund extra debt repayments.

    Read more about budgeting to get out of debt here or alternatively, check out the Savings Guide Budget Spreadsheet here.

    A MyCRA Credit Rating Repair tip to stay credit savvy…

    If you are educated on credit reporting in Australia, you will save money. Know what the rules are around credit reporting in Australia, and know what your credit file says about you. If you discover inaccuracies on your credit file you can save yourself money by having them removed.

    If you have neither the time, nor knowledge of legislation that is required to deal with Credit Providers, a credit repairer can advocate for you to make the case for removal of inaccurate defaults from your credit rating on your behalf.

    Image: artur84/ www.FreeDigitalPhotos.net

     

  • Consumer debt reduction: Watch out for new bank fees

    Our last blog post was about debt struggles and solutions –and how people can protect their credit file. Featured in this post were recent findings from Dun & Bradstreet’s bi-annual debt survey, showing one in three Australians will struggle to repay their debts in the September quarter.

    The Sydney Morning Herald recently published an article featuring this survey, titled ‘Australians still hooked on credit’. It reported that many people are still heavily reliant on credit to purchase something they could otherwise not afford, despite the assessment of their household’s financial outlook now being at a 20-year low. But the article reports some sections of the population are reducing their credit use. It reports Mastercard as saying:

    “The austere mood caused the annual growth in credit card numbers in Australia to slow to 1.76 per cent in the 12 months to May. Purchases made on debit cards jumped 17.3 per cent during that time as consumers sought more control over their finances.”

    If the downward trend to reduce credit continues, people will become more reliant on debit cards and Eftpos to make their purchases.

    But as the Herald Sun reports in its article ‘Banks are busy working on ways to replace income lost from fees‘, people may be penalised for this change. It reports a new Eftpos tax will result in an extra 10c interchange fee and 1c EPAL scheme fee increase on Eftpos transactions starting October 1, 2011. Here is an excerpt from this story:

    The company that runs Eftpos, EPAL, has given banks until
    next month to opt in to its new, higher interchange fee structure.

    “Banks are about to start charging for something they previously provided for free,” said Jost Stollmann, chief executive of a rival player in the debit-card payment industry, Tyro Payments.

    “In fact they supplied this service for less than free: they paid 5c each time someone used Eftpos.”

    “Now EPAL has reversed that subsidy and created a new 5c fee to acquirers, which will flow through to retailers and merchants.”

    The Australian Newsagents’ Federation say the new Eftpos fee
    regime will impose fees of up to 21c for each Eftpos transaction, up 110 per cent on existing fees.

    “No retailer can negotiate the interchange fee with his bank. The new EPAL regime is all about raising bank fees,” the federation says in a new advertising campaign.

    The story explains how banks have cut out exit fees on home loans, and many of the other fees that consumers have traditionally complained about, but have cleverly sought alternative ways of replacing the lost fees. It reports one way of recovering lost revenue from exit fees is to increase ongoing fees on home loans. The story reports fees in this area have increased on average around $75 a year since 2009. Also some banks have announced increased upfront fees on some of their variable home loans recently. The highest upfront fee increase was $600 on one Commonwealth Bank product.

    So consumers will have to bear the cost of reduced fees in some areas, with increased fees in others. If people want to refinance to a cheaper interest rate to save money, they won’t pay exit fees to leave that home loan – but they could pay higher upfront fees on many of the new loans they may want to switch to. Hmmm….

    Is the process of saving money and reducing debt just getting more difficult to navigate?

    How do we know the best ways to save money?

    For those who, despite all of the obstacles to success are determined to reduce debt – the best place to start is to get interested and updated on ways to save money. We encourage people to get educated about debt, and ways to avoid a bad credit rating, which can ruin people’s ability to obtain good credit for 5-7 years.

    The fact is credit is an essential part of being money smart in today’s society. Unfortunately we need credit. People can’t go back to wacking the money under the mattress. They simply cannot function without savings records and credit history in order to obtain major credit like mortgages and personal loans. So to succeed, it’s a matter of being educated about smart ways to use credit.

    There are a number of great places to start getting educated. We love the advice given on Australian blog Savingsguide. Also extremely informative is ASIC’s Money smart website. Of course, we can’t go past a trusted favourite like MSN Money.

    If people find despite their education on money principles, they still can’t get ahead due to the disadvantage of having credit rating defaults, writs or Judgments – it may be possible to start with a clean slate by having them removed. Not all credit files can be repaired, but those which contain adverse listings with errors, which are unjust or just shouldn’t be there are good candidates. Credit repairers completely remove defaults, writs or Judgments from people’s credit files, allowing people the financial freedom to choose the best interest rates, and financial products which are right for
    them. For example, people who are living with a bad credit rating who invest in credit repair can potentially save thousands on interest by the ability to select a cheaper interest rate. Contact us at MyCRA Credit Repairs for more information.

    Image: Salvatore Vuono / FreeDigitalPhotos.net

    Image: Ambro / FreeDigitalPhotos.net