The Northern Territory news Mon 27 Jan 2020
The Northern Territory news; NewspaperNT
Community newspapers -- Northern Territory -- Darwin; Australian newspapers -- Northern Territory -- Darwin
News Corp Australia
Copyright. Made available by the publisher under licence.
News Corp Australia
MONDAY JANUARY 27 2020 LIFESTYLE 21 V1 - NTNE01Z01MA Maxed-out cards mean stressed-out mum SOPHIE ELSWORTH STAY-at-home mum Rebecca Allen says money is the most stressful thing in her life as she battles paying off three maxed out credit cards totalling $16,000. The 32-year-old said costly events including her washing machine dying and expensive vet bills after her dog fell ill hit her hip pocket hard, forcing her to turn to plastic to make ends meet. We had a hiccup where my partner went to the bank and asked to put all the debt onto one card and he got talked into getting another credit card instead, Ms Allen said. It had a $4000 limit and instead of getting rid of it, it got used and since then its been an uphill struggle. Theres always something or some excuse as to why we only pay the minimum off each month. Many Australians battle a credit card hangover in the new year after festive season spending. Financial comparison website Mozos data shows there are plenty of balance-transfer cards where you transfer card debt from one card to another and enjoy honeymoon interest-free periods to help customers pay off debt faster. They span up to 26 months but usually come with transfer fees, annual fees and hefty interest rates. Mozo spokeswoman Kirsty Lamont said many Australians will be starting 2020 with a serious debt hangover. The best thing you can do is make a plan to pay off the debt as soon as possible, she said. Ms Allens three cards interest rates are up to 24 per cent and her minimum monthly repayments on the cards range between $41 and $163. She signed up to the Wisr app, which rounds up her purchases in her everyday account and then the rounded up amount is used to help pay back her card debt each month. Wisr chief executive officer Anthony Nantes said many Australians would be receiving large credit bills from the Christmas and new year period, adding extra pressure on budgets. Theres a lot of spending that goes on, he said. Mr Nantes said changing habits was the key to kicking the debt. Automating debt reduction when you buy coffees, sandwiches or take an Uber can help you pay down some of your debt, he said. Other institutions, including ING, also have round-up tools that allow customers to round up spending on their card to the nearest $1 or $5 amount, then tip it into other accounts or debt. UPHILL STRUGGLE: Rebecca Allen, 32, is hoping to get rid of her credit card debt of $16,000 in 2020. Picture: Jamie Hanson TOUGH new financial challenges face young people as money becomes easier to spend but harder to save. And parents play a much larger role in childrens financial futures than they might think. A new report by the Commonwealth Bank says young Australians are increasingly being held accountable for their money decisions made early in life. Many children have mobile phones before their teens and are buying games, music and other entertainment online, while record-low interest rates deliver their savings accounts next-to-no interest and later make saving for a first home much harder. The CBA report, The Right Start, says young people must deal with a fast-changing financial world amid rapidly evolving technology. A young persons early experiences of financial attitudes and behaviours shape outcomes later in life, it says. The reports author, Professor John P de New from the University of Melbourne, Make kids dollar smart Parents need to teach children how to deal with money in a rapidly changing world, writes Anthony Keane said digital technology had made it easier than ever for children to spend money. Its understandable that, in this increasingly cashless society, children may mistakenly think things are free, he said. They watch us buy things with the tap of a card, shop online, download music and movies, often without any notes or coins exchanged. Prof de New said positive behaviour learned early would set foundations for good financial habits as young adults. It is likely that parents underestimate the extent to which they influence their childrens behaviour with their own behaviour, he said. Children learn very efficiently by repeated example that is why children can speak a language fluently before attending school. Peoples Choice Credit Union financial planning support manager Lisa Jones said lower interest rates could pose a challenge for young savers. But there are also many accounts that promote positive savings habits by offering bonus interest for ongoing deposits, she said. Although rates are at a historic low, younger children can still learn from the positive behaviour these accounts promote. Ms Jones said young adults might consider highergrowth investment strategies to save for a home deposit, but ensure they understood and could manage the risks of growth assets such as shares. The biggest challenge comes from new forms of finance, she said. Buy now, pay later schemes make spending much, much easier but the penalties and fees for slipping up can really bite down the track. CBAs general manager of corporate responsibility, Kylie Macfarlane, said teaching young people good money management did not need to be complex. A useful tip can be rewarding your kids with an additional boost to their savings fund if they reach their goal ahead of time, she said. HQmoney saver Our guide to investing in the sharemarket INSIDE WHAT PARENTS CAN DO Talk about money and financial concepts at the dinner table. Teach children the difference between needs and wants perhaps getting their help to prioritise grocery shopping lists. Make savings fun with competitions between family members. Track savings visibly at home, perhaps on a fridge or whiteboard. Source: CBA