7 of the biggest financial failures you can make
1. Get caught by fast lenders
Like a carrot hanging down on those who need money quickly (…). Quick loans are just that – lenders who offer fast execution cash loans that are supposed to be for a “short term” period of say one month. And, with fees up to 400%, it’s one of the most expensive loans you can get.
So how do these loan sharks get away with a squirrel grabbing your nuts?
They attract people because they are quick and convenient, but they often fail to check affordability and make repayments unaffordable – so the borrower is trapped. Paying off a loan is hard enough, let alone with such outrageous fees on top of what you’ve borrowed. And, the more you borrow, the worse off you’ll be.
Discover ways to avoid getting caught by a squirrel www.watchyournuts.com.au. If they have already sunk their teeth, call the National Debt Helpline on 1800 007 007 to find ways to relieve the pressure – pronto.
2. Being aspired to “own now pay later”
“Take advantage now… and pay later! It’s hard to resist the phenomenon of having everything you want now, even if you can’t afford it, and paying in the future. But many consumer advocates and personal finance experts say it’s a rapidly growing problem. And yes, payday loans are disastrous for your hip pocket, but don’t get sucked into other easy and consumable loans that are just as bad for debt.
3. Have multiple retirement accounts
Unfortunately, our superhero powers don’t increase with the number of super accounts we have – they decrease. In fact, having multiple retirement accounts is actually a pain in the hip pocket. The Productivity Commission estimates that about a third of superannuation accounts are unintentional, unwanted or unnecessary multiple accounts. And that, my friend, costs us about $ 2.6 billion a year in fees. Visit the ATO Where MonGov (you will need to create an account) to keep track of your super, consolidate your funds and find lost super accounts.
4.0% “honeymoon period” credit card balance transfer
Before you say “yes” and allocate your entire credit card balance to an enticing new card with 0% interest, be sure to read the fine print. According to the Australian Securities and Investment Commission, 1 in 3 Australians actually increase their debt with the balance of a transfer. How do they? You transfer your entire credit card balance from one card (usually a different financial institution) to the new card and get 0% or low percentage interest rate charges during the promotional period ( honeymoon period). But you have to pay the balance within this time. If you don’t? You will be faced with often higher interest charges than other credit cards. There may also be other hidden charges and fees which also outweigh the benefits, such as daily and / or higher interest charges on new purchases made on the card, transfer fees, annual fees, etc. And, one of the main issues is that people don’t cancel their original card. They therefore end up with two cards, two sets of fees and more credit available to accumulate…. more debt.
5. Get rich in quick drawings!
The Bitcoin and cryptocurrency boom, Karl Stefanovic’s alleged investment, the negative negative gear … if it sounds too good to be true, it probably is. There are more money scams than Nike Kobes in the NBL, so use your wits and do your due diligence. Check out these Investment warnings and scams before signing up for anything.
6. Late fees
Fill up on gas, electricity, credit cards, personal loans, phone bills… who has time for that ?! In fact, you will need to take the time. If you miss your monthly credit card payment, or are late with your phone bill or other bills, these companies will charge you – unless you dispute it (and sometimes you will still be charged). The easiest way to get around these pitfalls is to set up direct debits (and make sure you have the money in the account to cover the bills); set up payment plans; shop for better phone / data / energy / appliance deals; request an extension or request a .
7. Free trial periods… for a limited time
We’ve all been drawn to these – the latest streaming service, the ‘free’ express mail-in, the new sports / social media / dating app… They draw you in with a 4 week free period (but you must provide your credit card details), then you will automatically charge after the trial period – unless of course you remember to cancel your membership at the end of the trial period. And who remembers doing that? Before you know it, you’ve got a collection of 20 domain names you don’t want, ad-free streaming music you never use, express mail insurance that you used once on Christmas and that you’ve been paying $ 9.95 every month since. Be careful, the trial periods can bite!
Need help? Visit the National Debt Helpline or call 1 800 007 007 to discover smart ways to reduce financial pressure today.