Australians attitude to debt and savings - a recent survey

A recent survey conducted by RaboDirect has found the following stats:

• About 74% of respondents believe paying off their debt is the best way to save money
• One in five credit card holders worry about not paying off their bill in full each month, yet one in six are happy to make purchases knowing they cannot pay for it in the interest free-period.
• About one third of survey respondents consider their financial situation has worsened in the last year and have taken steps as a result. They have cut back on luxuries, such as dining, entertainment and holidays, and some have also considered their day-to-day shopping habits.
• The survey also found that 28% of Australians say their savings would only last two months if they lost their job
• Just over one in ten (13%) have no savings at all. This paints a worrying picture at a time of the year when the job market traditionally slows down.
• Low interest transaction accounts are the most popular home for ‘savings’ with 46% of regular savers putting money in their transaction account (representing 41% of total savings in last six months). This is despite the fact that interest paid on these accounts is negligible and often eaten away by fees

Below are some tips for better financial management:

• Set a budget and revisit it regularly and adjust as necessary to match personal/financial needs or changes to your finances. eg got married, started a family or got a new job
• Spend less than you earn!
• Pay off your most expensive, non deductible debt, first eg credit cards
• Regularly check that your financial products (such as your mortgage loan, transaction and savings account, insurance, credit cards etc.) suit your needs and offer the best value
• Have your salary paid directly into a high interest savings account rather than leaving money idle in a low-interest bearing account
• Seek help early if things get out of hand - speak to a financial advisor for more help

Savers can save $330 by switching

Savings account holders can save up to $330 by switching to a better account. According to consumer group Choice, nearly 80% of Australians had not considered switching banks in the last two years.

Choice's Better Banking campaign director Richard Lloyd said "that's what the major banks rely on, they rely on lots of Australian consumers staying where they are and that's when you get hit by high fees, poor interest rates and unfair terms." What we're saying today is `consumers don't wait for the government's reform package ... if you take simple steps now you can give yourself an early Christmas present'.''

Mr Lloyd continued by saying that smaller banking sector players were usually those offering the best deals and consumers should not be nervous about moving to smaller finance institutions as they were regulated in the same way as banks. Federal Treasurer Wayne Swan said: "I'd encourage every Australian family to check out the range of products on offer and compare them to the big banks.''