Simple Ways to use your tax return
Author: adminAustralians should use their tax return to reduce debt rather than spending it frivolously, the nation’s largest credit union says.
Credit Union Australia (CUA) acting chief executive Rob Nicholls said consumers should repay existing debt in the current economic climate or invest the tax return for future growth.
“While those shoes or new pair of jeans may be a `must have’ today, there are better ways to spend a tax return that could provide you with an endless shoe or jeans collection in years to come,” Mr Nicholls said.
There were obvious ways for Australians to use their tax return including to reduce debt, Mr Nicholls said.
“It’s amazing how peacefully you will sleep when you don’t have a $5,000 credit card debt hanging over your head,” he said.
Recent data from the Reserve Bank of Australia (RBA) confirm consumers have increased their restraint with spending and subsequent levels of debt.
The total balances outstanding on credit and charge cards fell one per cent in March, while the average balance on a credit card, $3119 in March, grew by one per cent over the past year, RBA data revealed.
This was the slowest annual rate of growth in credit card balances since records started 14 years ago.
Repay any interest free loans, particularly those offering 12-month interest free terms when buying furniture or whitegoods, Mr Nicholls said.
“Some people are unaware that once this term has expired a large interest rate is usually applied to the loan, which can end up costing an individual much more than the original cost of the item,” he said.
Mr Nicholls said consumers should open an online savings or cash management account to take advantage of the higher interest rates on offer.
“Such accounts are great because they allow you access to your funds whenever you like,” he said.
Buy only essential items and avoid spending the tax return on conspicuous consumption, Mr Nicholls said.
“Tax returns can come in handy for necessities such as dentist bills, school or uniform fees, a car registration or car service,” he said.
“Alternately you could use it to start your Christmas shopping early.”
AAP
How to Work Out if Debt Consolidation is for me?
Author: adminYou want to keep your home, but with rates on the move, and your personal debt getting out of control it will only get harder from here on.
Debt consolidation or debt refinance may be an option. What this does is that a lender will refinance all your debts with whomever the credit provider is, and will refinance these into your mortgage. What’s the benefit? A couple outcomes –
1- single repayment,
2- you have the chance to reduce your monthly repayments - which means more cash in your pocket!!!
This is not always going to be as easy as walking into your existing mortgage lender and asking for a consolidation. I’m sure they will be willing to help however they will have various rules & limitations which may not fit all your needs or goals. There are lot of funders out there all with different rules to play by. The value of your security or house may well be a factor along with your income type and level. The reason you are in a particular situation may well determine which lender will provide a better option. It may be of assistance in engaging a finance broker to work through the best options for you. This is especially the case if you have been having trouble keeping up with it all and have late payments.
In a lot of cases the refinance and consolidation of all your liabilities like outstanding rates, tax debt, store cards and alike may not be able to be renegotiated in total & therefore other strategies may need to be considered in conjunction with the refinance.
All these approaches should only be considered for an intermediate period. It may take 12-24 months to re-engineer your financial position for the future at which time a new set of strategy’s are determined and adopted to meet your next series of financial goals.
So if you think you can survive better with getting your repayments down before rates continue to go up, give Finance Know How a call or email, or better yet you can talk to Howard online!
