Easy Debt? There's an app for that.

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9 October, 2017

We sometimes need to create a debt in order to get the things we need or let’s face it, the things we may want but can’t quite afford at the time. Your Bank Manager and many financial Gurus will say that as you progress in life you need to improve your credit rating in order to provide access to more borrowing. This is with a view to having the borrowing power to purchase larger things such as a house. A place to live that can also provide us with financial capital in the future. To some, owning such capital is merely a pipe dream. Without a reasonable credit rating borrowing such large amounts is reasonably hard. Or at least it should be which is at the heart of the current problems with Australia’s personal debt issues and outrageous housing costs.

So debt is OK? Debt is OK but only if it is manageable debt. That makes more sense. It’s only when we can’t repay the debt that the nightmare of long-term debt begins. What could be considered a small debt can be amplified by factors like interest or associated penalties to a point where it seems we can never pay it off and failing to meet your payments can also effect your credit rating.

Its not the stereotypical Hollywood scene of a run down, out of the way shop you walk into or some sleazy character in an old tweed jacket behind the counter wearing far too much bling giving you a potentially bad deal on a high interest loan. A potentially bad deal is available from cute furry animals or goofy Wizards or even directly via your phone. Your favourite retailer with their associated credit cards can even bring you financially undone if you can’t meet the payments or if you only ever pay the minimum amount. Debt is never a case of getting it and just moving on.

The relatively new Afterpay app sweeping across retailers may have the potential to keep the Money Bunnies quivering in their burrows and Wally wizards wasting away. Afterpay is similar to the old-fashioned lay-by system in the way it provides for several payments over time. Although there are no direct interest charges and some helpful continued borrowing prevention there are some concerns over the fees charged and penalties as well as the credit code loopholes it avoids. The fact that in only a short space of time the company’s revenue has accumulated some big profits from the penalties and fees charged to consumers unable to meet their payment options. This signals a cautious warning to the welfare agencies.

The Moneysmart website has a great range of detail about how to avoid problems with loan debt including Payday lenders and provides information on borrowing basics and a wealth of other debt issues:

https://www.moneysmart.gov.au/borrowing-and-credit

Afterpay it seems a bit too early to have identified or assessed any associated issues so like all debt options the best thing is to consider your ability to meet the repayments or if you really need to borrow at all.

As there is an app for getting into debt there is also the Affordable SA app that can help you access support to deal with debt and other cost of living issues. For certain essentials such as a fridge low-income earners can access a range of better choices such as a No Interest Free Loan, see the app for details and other great money saving services. Download the Affordable Sa app available on Apple or Google play store or visit the website at www.affordablesa.com.au to get informed or ring the Helpline on 1800 025 539

See more articles about Afterpay

ABC

http://www.abc.net.au/news/2017-09-26/afterpay-consumer-debt/8988394?section=business&smid=Page:%20ABC%20News-Facebook_Organic&WT.tsrc=Facebook_Organic&sf117017431=1

SMH

http://www.smh.com.au/money/borrowing/modern-day-layby-apps-could-be-alltoconvenient-debt-traps-20171002-gysn40.html

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Christmas Lunch 2022

Christmas is a special time of year but it can be especially hard on those who are less fortunate or alone. Thankfully, there are groups that organise lunches for people on Christmas Day. If you are or know some one in this situation , please find a list of service providers attached

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50 Days to Go....50 Ways to Save for an Australian Christmas

Community

1. Contact your local Salvation Army and ask about the Christmas Cheer Program

2. Seek out which church based organisations are offering Christmas day lunch in your area

3. If don’t want to feel the financial pressure of Christmas Day, consider volunteering your time on Christmas Day to help others

4. Contact your local council, community centre or library to see what free Christmas activities are offered in your area during the Christmas period

5. Visit your local op shop for Christmas supplies

6. If you are considering buying a pet as a gift for Christmas, consider adopting from a rescue centre

Food

7. Buy in bulk and split the cost with friends and/or family members

8. Start buying non-perishable groceries now

9. If you know that there will be non-perishable groceries that you will need for Christmas, buy 2 of them when they are half price, that way you will have one for now and one for Christmas

10. Instead of an expensive hot turkey, consider a non-traditional, southern-hemisphere inspired Christmas Day menu of cold meat and salads

11. As most supermarkets are closed on Christmas Day, pay them a visit the night before right before they close to see what food has been discounted

12. It doesn’t snow this side of the equator on Christmas Day, so take Christmas outside. As an option, suggest that everyone bring a salad or a packet of sausages to cook on the public BBQ at your local park.

13. Instead of trying to buy (or make) a Christmas pudding, consider making a ‘non-traditional’ ice cream cake

14. Consider using accumulated supermarket loyalty points to buy your Christmas food

15. Instead of hosting a Christmas lunch or dinner, consider the cheaper option of a Christmas breakfast (no turkey required)

16. Avoid Christmas hampers that have year-long payment arrangements. You can end up paying a lot more for items compared to if you purchased them outright.

17. Don’t feel pressured to serve ‘traditional’ food at Christmas time. In Japan, it is tradition for around 3.6 million families to get a ‘holiday party bucket’ from KFC on Christmas Eve…

18. Instead of buying a whole turkey, ham or chicken, consider buying separate cuts of meat (e.g. legs, wings, roasts, etc.)

Presents

19. Commit to a budget. Draw up a table with who you are buying for and how much you can afford to spend on each person. Do not go over your budget.

20. If the children in your family are getting older, consider the option of a Secret Santa (each person is responsible for only one gift)

21. Take advantage of the extended Christmas shopping hours. There will be less people around, which means you may feel less stressed and rushed

22. Don’t feel pressured by others, or yourself, to buy Christmas presents you cannot afford

23. Wrapping paper can be expensive. Consider newspaper, material, cellophane, brown paper, etc

24. Consider baking cookies or making a Christmas pudding as alternative to buying someone a Christmas present

25. Consider making homemade pickles, jams, preserves and giving them as gifts

26. Only go shopping for Christmas gifts when you know what you want to buy – avoid impulse purchases that are not within your budget

27. Save money on buying Christmas cards by sending your Christmas greetings electronically via email, text or social media

28. If you are creative, try a DIY present – soaps, candles, a knitted scarf, a tie dye t shirt, a photo frame, a painting, etc

29. Consider giving the ‘gift of time’ to someone. Create a coupon book of activities that you could do together in the future (e.g. watching a movie of the other person’s choice)

30. Do not put yourself in financial hardship just so you can buy what others consider to be ‘the most amazing, best Christmas present of 2021’… it will be something completely different by Christmas 2022

31. If you don’t know what to get someone, consider a small charity donation on their behalf

32. Consider giving gift cards instead of actual gifts

33. Avoid the temptation of getting ‘quick, easy’ money through pay day lenders to buy Christmas presents

34. Recycle Christmas wrapping paper and gift bags from previous years

Decorations

35. Get your children involved by making your own Christmas cards

36. Buy your 2022 Christmas decorations on or after Boxing Day

37. If buying a new Christmas tree is not in your budget this year, consider designing and building your own

38. To give the traditional ‘Christmas tree’ a modern twist, decorate an indoor plant

39. Make your own table decorations – i.e. use a roll of wrapping paper as a table runner or pick foliage from your garden

40. Make your own Christmas stockings by decorating old pillow cases

41. Use newspaper and craft paint to make a home-made Christmas garland

42. Choose solar Christmas lights over electric

43. Do not put yourself in debt trying to make your house look like something you saw online. You don’t need to make people believe that you live in a European, snow covered cottage…

Budget

44. Are you a casual employee and does your work place close over Christmas? Make sure that you have funds saved up to cover essential living expenses over the Christmas break.

45. Do not put yourself into financial hardship for the sake of others. If you cannot afford to attend a Christmas function, it is ok to politely decline the invitation.

46. It is inevitable that there will be people out there that will spend more/less than you at Christmas. Remember to work within your budget this Christmas

47. The weather at Christmas time can be extremely hot. Consider doing a home energy audit on your air conditioner/cooling system to see the amount of electricity it uses and what it is costing you

48. For Christmas 2022, consider putting money away each fortnight into a separate bank account

49. Create a Christmas spending budget and keep track of food, presents, decorations, etc

50. Try to avoid using the money you would spend on essential living expenses (rent, electricity, etc) to pay for Christmas. This will catch up with you when Christmas is over.

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Only a Week till Christmas

Where does the time go? Only 7 Days until Christmas!

Time to pick-up last-minute gifts and prepare for celebrations with family and friends. There’s presents to wrap, food to make and lots and lots of little jobs that can make it a very busy time.

Christmas Finances

The tricky thing about the festive season is that life doesn’t stop. Your real estate agent will still direct debit your rental payment, your electricity company will still want your quarterly bill paid and your telco company will still demand your BPay payment on a set day of the month.

With the added expense of Christmas, the end of the year can put a lot of pressure on people’s financial situation and unfortunately here on the Affordable SA helpline we tend to see the aftermath at the start of the new year.

Being part of the billion-dollar Christmas debt hangover is no way to start the New Year. If you are struggling with your expenses call the Affordable SA Helpline on 1800 025 539 to speak to a Financial Counsellor.

You can also find a range of programs that can help here:

https://affordablesa.com.au/programs/money-and-finances

Food for Christmas

Have you got enough food for you and your family this Christmas?

There's still time to access food pantries and emergency relief, but be quick as services may be closed, providing limited service or have different hours during the Christmas and New Year period.

A food pantry offers free or low cost food and groceries to the community. Find a local Food Pantry here:

https://affordablesa.com.au/programs/food/food-pantry

You can find local, emergency relief here:

https://affordablesa.com.au/programs/food/emergency-relief

You can also call the Affordable SA helpline to be connected to services near you that can help. Call the helpline on 1800 025 539

A Christmas Together

It's also an important time to check in on people you know who may be experiencing loneliness or hardship.

Spare a thought for your elderly neighbour who lives alone, your friend who is experiencing financial hardship, your relative who is going through a separation or your co-worker who is struggling with depression.

If you know someone who finds this time of year especially difficult, consider reaching out to them to show that you are thinking of them.

If you or someone you know finds this time of year especially difficult, services such as Lifeline are available 24 hours a day 7 days a week to take your call on 13 11 14

https://affordablesa.com.au/programs/health-care/lifeline

Have a Merry Christmas South Australia

From everyone at Affordable SA, we wish you a very merry Christmas and all the best for 2021!

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