Some spooky statistics arrived just in time for Halloween: About 40% of Australians have credit card debt, while 18% have an outstanding Buy Now Pay Later (BNPL) debt.

According to Compare the Market’s Household Budget Barometer 2024, two-thirds of adult Australians surveyed have some type of debt that isn’t a home loan.*

While good financial management is important, Compare the Market’s Chris Ford said it can feel overwhelming – even scary – to confront our financial habits.

“Looking at our finances can be like a house of horrors for us,” Mr Ford said.

“Unfortunately, many people have been forced to take on debt to afford necessities like groceries, fuel and energy.

“But with Halloween upon us, it’s a perfect time to face our financial fears that can lurk in the shadows.”

Mr Ford has eight tricks to avoid a financial fright:

1. Reassess your budget

A budget is a powerful tool — if you stick to it. Creating a budget and ignoring it is like carving a pumpkin and never lighting it. To avoid this trap, ensure you understand where your money is going and always aim to spend less than you earn. If you don’t have a budget yet, now’s the time to start. Use Compare the Market’s budget planner to help you track and adjust your spending regularly.

2. Build the savings nest egg

Living pay cheque to pay cheque can leave you vulnerable to financial scares. A consistent savings habit is key to building a savings nest egg. Even if the amount seems small, saving regularly ensures you have funds for unexpected expenses or future goals. Consider splitting your savings into short-term (for holidays or home improvements) and long-term (for larger goals like a house deposit) accounts so you don’t get spooked.

3. Pay off any debts with spookily high interest rates

Prioritise any debts that are known to have eye-wateringly high interest rates, like credit card debt, buy now pay later, personal loans and payday loans. If you have some spare cash, and you’re tossing up between putting it into a savings account or paying off a debt, it’s usually a good idea to face your fears and tackle the debt first because the interest rates on a debt can be north of 20%.

4. Reduce your credit card limit or get rid of it

If you’ve been known to max out your credit card or make late payments, it could be time to break up with your credit card. Just don’t ghost the credit company; make sure you pay it off before you close the account or reduce the limit.

Reducing your limit or closing your credit card may help boost your borrowing power. According to a Compare the Market analysis, a $10,000 credit card limit held by someone earning $100,000 would reduce their borrowing capacity from $552,000 to $505,000.00 – a difference of $47,000.

5. Make sure you’re on a competitive plan

From credit cards to insurance, we need to assess which financial products are sucking our savings. Never auto re-new your insurance and regularly check your accounts to make sure you’re on a competitive plan. Comparison websites like Compare the Market can help you identify good deals. A little research can go a long way and might save you a ton of money.

6. Don’t be under-insured

Planning for the worst isn’t fun, but it’s essential. Failing to have adequate insurance coverage can turn a bad situation into a nightmare. Whether it’s health, life, home, or car insurance, review your policies regularly to ensure they’re up to date and offer sufficient protection. Speaking to a financial adviser can help ensure you have the right coverage for your current circumstances.

7. Switch to fortnightly repayments

Don’t be tricked into paying more than you need to. By making a small change to their repayments, homeowners could save tens of thousands of dollars and pay off their loans faster.

Compare the Market crunched the numbers and found that a person with a $600,000 loan could save over $160,000 in interest over the life of the loan and cut down their loan term by over five years if they were to switch to fortnightly payments instead of monthly to pay off a little bit extra each year.

8. Look for cashbacks

It’s not a scary Halloween trick, but a recent cashback stacking opportunity could see some borrowers claim up to $5000 back when they take out a new home loan or refinance through Compare the Market and combine offers from the comparator with their lender of choice.

Compare the Market has launched a new $2000 bonus for new homebuyers and refinancers who apply for and settle a loan before 31 December 2024**. The bonus can be combined and “stacked” with other offers available through the more than 17 lenders on Compare the Market’s lending panel. It could mean certain borrowers are able to get two bites of the cashback pie.

One lender is offering up to $3,000 cashback for eligible customers and loans. Paired with Compare the Market’s cashback, eligible borrowers could receive up to $5,000 cash back on their eligible loans.

But don’t refinance just for the cashback, if it’s not attached to a low rate the higher repayments might haunt you.

**Visit our website to check eligibility and terms for all offers.

*Compare the Market Budget Barometer 2024 surveyed 3000 adult Australians.

For more information, please contact: 

Natasha Innes | 0416 705 514 | natasha.innes@comparethemarket.com.au

Compare the Market is a comparison service that takes the hard work out of shopping around. We make it Simples for Australians to quickly and easily compare and buy insurance, energy, travel and home loans products from a range of providers. Our easy-to-use comparison tool helps you look for a range of products that may suit your needs and benefit your back pocket.