SAVINGS TIP 5
PAY OFF YOUR CURRENT DEBTS
The tips/general advice below are general in nature & do not take into account your objectives, financial situation, or needs. This information should not be solely relied upon. The factual information is not intended to imply any recommendation or opinion about a financial product. Before making any financial or property decisions you should consider your personal circumstances and seek professional advice from professionals such as Financial Planners. Before using our website and reading the content you should read our website terms and conditions.
pay off your current debtsif you pay off any existing debts such as personal loans and credit cards, you will reduce the amount of interest you are paying to financial institutions. Once paid off, you can put your excess cash-flow into savings products to boost your financial position. The interest rates on personal loans and credit cards tend to be a lot higher than the interest rate on your savings accounts, therefore it is a wise decision to make sure you are debt free before saving for your first home.
If you have borrowed $10,000 in the form of a personal loan at an interest rate of 12% you could be paying approximately $1,200 in interest every year, this interest is considered dead money as it is going straight to the banks! Paying this debt down before you start saving could help you in the long run.
Do you want to work out how much your current debt is costing you?