Money Matters: April Edition

Good news for consumers and mortgage owners with the Reserve Bank deciding to keep interest rates on hold for another month continuing the record low cash rate at 2.5%. However, it’s going to be a tricky situation to continue the trend with the higher dollar, falling commodity and property prices continuing to move in the upward direction – something has to give way. Not surprising though is the result that such combination of low rates and higher property prices can have on household cash flow and debt capacity. A recent report by Barclays has revealed that the average property price is now at 4.3 times annual income and household debt has soared to 177% of disposable income – see my simple tip below for paying debt off sooner. The job rate - surprisingly fell to 5.8% from 6.1% the previous month, which is more positive news however there is going to be some interesting outcomes from next months budget with Treasury already revealing that the age pension will increase to age 70. More coverage on the budget next month. In the meantime start preparing for a series of ongoing fundamental system changes to our economy over the next 12monts and beyond. Caution: It’s about time you started reviewing your short and long-term debts and having a smarter plan in place. Tip: Force yourself to pay debts off faster. You could save over $5,000 in interest and pay off your debt 2.4 times sooner if you just paid 1.5x the minimum repayment^ on a $10,000 credit card debt*.  

^Minimum repayment calculated as 2% of the credit card balance

*http://www.moneymanager.com.au/money/tools-and-guides/calculators/credit-card-repayment

Posted 11 years ago 1 Minute(s) to read