With extremely high levels of household debt at the moment, many Australians are currently struggling to keep up with their repayments.
This runaway debt is catching up to more of us, with the Australian Financial Authority this week revealing that total personal insolvencies increased 0.6 per cent in the September quarter 2015 compared to September quarter 2014.
This was a second consecutive rise, with personal insolvencies in June quarter 2015 rising 0.9 per cent compared to the same quarter last year.
The new statistics also revealed that the number of debt agreements in the September quarter increased by 2.4 per cent compared to last year while bankruptcies fell by 0.1 per cent and personal insolvency agreements fell 33.3 per cent.
With this rise in the number of insolvencies and debt agreements, it’s likely that many Australians have sought out the services of debt solution companies. In desperate times of overwhelming debt, the advertised promises of these firms to “solve all of your finance problems” can be quite tempting.
But is there a catch?
Let’s take a look at these companies and what they do.
What are debt solution companies?
Debt solution companies are firms that people pay to manage their personal debt problems. These groups usually offer to do this through:
Debt consolidation and
Debt agreements
Debt consolidation involves repackaging all debts into one loan that may or may not have different fees and interest rates. Companies that offer debt consolidation have to be licensed with the Australian Securities and Investment Commission (ASIC).
These groups can also set up debt agreements with creditors on your behalf when you cannot pay everything you owe but want to avoid going bankrupt. For a fee, the debt solution company can act as administrator to organise a debt agreement proposal based on what you can afford to pay. You pay creditors back the settled amount over a set period of time.
Potential dangers
Since debt solution companies are run for profit, sometimes it is worth considering whether they are there to help or to take advantage of people in desperate situations. Their fees can set you back even further and their ‘solutions’ can actually hurt you more.
For instance, the new loan they consolidate your debt into might have a higher interest rate, costs or be longer term. When the loan is longer term, bear in mind that although your repayments and interest rate may be lower, you’re paying more in the long run though fees and interest over the years. Also, if they’re consolidating your unsecured debt (e.g. credit cards) into a secured loan (your mortgage), you could be putting your home on the line. The mortgage might become even harder to pay off, thus putting your home more at risk.
The adverts for these debt solution companies can often downplay these serious consequences. It’s important to put your emotions aside and be rationale when considering signing up with these companies.
Free Financial counselling
As opposed to debt solution companies which strive to generate profits for shareholders, the number one priority of free financial counselling is to help those in need. Financial counselling can offer independent and confidential financial advice to improve your financial situation in a variety of ways. This can include helping you do up a budget, seeing if you’re eligible for government assistance or referring you to other social help services if they recognise a wider problem (e.g. gambling help, drug rehab, mental health counselling).
Financial counsellors can do for free what many businesses might charge you for. Instead of directing you towards the most desperate measures, they can help you to consider everything you can do to manage your debt in the most efficient way possible.
If you need debt help, you can call the financial counselling hotline on 1800 007 007 from 9:30am to 8:00pm, Monday to Thursday & 9:30am - 4:30pm on Fridays.
**Article published at http://www.canstar.com.au/balance-transfers/debt-solution-companies-vs-financial-counsellors/ retrieved 4/11/15****
Important Update
As of January 1st, 2025 the Affordable SA app will no longer be available. If you're looking for assistance or to connect with programs and services near you, please refer to our website: affordablesa.com.au, to access the assistance you need.
Affordable SA will still be available as a FREE service via website, where you can find all the services you need, in the palm of your hand.
50 Ways to Save This Christmas
The holiday season is a time of joy and togetherness, but it can also come with financial stress. From expensive gifts to lavish dinners and decorations, the costs can quickly add up. However, with thoughtful planning, creativity, and a focus on meaningful moments rather than extravagant spending, you can enjoy a magical Christmas without breaking the bank. This guide will show you how to save on gifts, food, decorations, and more, while still making the season special. Whether you’re looking to cut costs on presents, host an affordable dinner, or find ways to decorate your home on a budget, these tips will help you make the most of the holidays without overspending.
Here's some tips to start:
Borrow or Swap Items
Need something special for your Christmas celebration? Borrow from friends or family instead of buying new. Whether it’s a serving dish or decorations, sharing saves money and resources.
Embrace Free Fun
Focus on free or low-cost traditions like watching Christmas movies, driving around to see holiday lights, or hosting a board game night. Sometimes the best moments are the simplest ones.
Remember, saving money this Christmas doesn’t mean sacrificing joy or festive spirit. By planning ahead, getting creative, and prioritising what truly matters, you can celebrate the season without financial stress. Whether it’s through thoughtful gifting, resourceful decorations, or embracing community events, these tips will help you enjoy a budget-friendly holiday that’s rich in meaning.
You can sort Christmas savings tips by category below.
Understanding Electricity Costs and Renewable Energy in 2025
The way Australians generate and use electricity is evolving rapidly, with a significant shift toward renewable energy sources. South Australia, once known for power shortages, became the first major jurisdiction to be powered entirely by solar energy—a remarkable milestone. As renewable energy technology becomes more widespread, you may wonder: 'will electricity become cheaper, and what steps can I take to reduce their bills today?'
The answer is promising: electricity costs are expected to decrease over time, but you can start saving now with smarter energy habits, better provider choices, and a deeper understanding of your rights as a consumer.
Your Rights as an Energy Consumer
As an energy customer in Australia, you’re protected by laws that govern your dealings with energy retailers and distributors. These rights ensure transparency, fair pricing, and access to essential energy services. Familiarising yourself with these regulations helps you make informed decisions when choosing providers and addressing billing concerns.
Choosing the Right Energy Provider
1. Use Energy Made Easy
The Energy Made Easy website is a free government service that allows households and small businesses to compare electricity and gas plans. Simply input your details to view a range of offers that suit your energy usage and location. You can also contact them directly at 1300 585 165 for assistance.
2. Key Factors to Consider
When evaluating energy plans, don’t focus solely on price. Keep these factors in mind:
- Contract Length: Are you locked into a long-term agreement, or can you switch plans easily?
- Fees and Discounts: Look out for hidden fees or discounts that may expire after a set period.
- Special Deals: Some plans offer incentives like sign-up bonuses or rebates, but read the fine print to understand long-term costs.
3. Time-of-Use Tariffs
Did you know the time you use energy can affect how much you pay? Time-of-use tariffs mean energy costs vary depending on peak and off-peak periods. Adjusting your habits, like running appliances during off-peak times, can lead to substantial savings. In South Australia, off peak times for residential is 10am - 3pm.
4. Specific Plan Types
Certain plans may cater to your unique situation:
- Smart Meter Plans: These allow for detailed tracking of your energy use.
- GreenPower Plans: For those committed to renewable energy, these plans offset your consumption with sustainable energy sources.
- Solar Energy Plans: If you have solar panels, look for plans with competitive feed-in tariffs.
- Regional Plans: Some plans are better suited for urban or rural areas, depending on infrastructure.
Reducing Energy Usage to Lower Bills
One of the simplest ways to save money on electricity is to use less of it. Conducting a home energy audit can help identify energy inefficiencies and opportunities to save. You can conduct this audit yourself by borrowing a free Home Energy Audit Toolkit from your local library.
Living Areas
- In Summer: Close windows, doors, curtains, and blinds during the day to keep the heat out. Use fans instead of air conditioners when possible, and if using air conditioning, set it to 26°C.
- In Winter: Seal draughts by closing windows and curtains. Set central heating to 18°C.
- Lighting: Switch to energy-efficient LED lights and turn them off when not in use.
- Standby Power: Switch off appliances at the wall to eliminate standby power usage.
Kitchen
- Ensure adequate space around your fridge for ventilation and check that its seals close firmly.
- Cover pots and pans when cooking to retain heat and reduce energy use.
- Only run the dishwasher when it’s full.
Bathroom and Laundry
- Wash clothes in cold water whenever possible. If using hot water, set it to 60°C.
- Dry clothes on a line instead of using a dryer.
- Install low-flow showerheads to reduce hot water usage and aim for showers no longer than four minutes.
Accessing Financial Help for Energy Bills
If you’re struggling to pay your energy bills, financial assistance may be available. Options include:
- Temporary or ongoing bill relief through government programs.
- Guidance from us at Affordable SA, call us today on 1800 025 539.
Additionally, explore our Utilities Programs listed on Affordable SA, which provide tailored solutions for reducing energy costs and managing bill payments.
The Future of Renewable Energy and Costs
As renewable energy becomes the backbone of Australia’s power grid, the overall cost of electricity is projected to decline. Solar power, wind energy, and advancements in battery storage are paving the way for a greener, more affordable future. Programs such as GreenPower and feed-in tariffs for solar customers offer opportunities to actively participate in this transition while saving money.
However, the key to maximising these savings lies in understanding your energy consumption and making adjustments today. By selecting the right provider, using energy-efficient appliances, and tapping into available support programs, you can enjoy both immediate savings and long-term benefits as Australia transitions to a renewable energy future.