Some say “debt is a part of life”. While it is true that most Australians will acquire debt to achieve long-term goals (such as buying a house), minimising debt is arguably the best and easiest way to save money. Any debt and associated fees need to be clearly understood and manageable given your individual financial situation. It is very difficult to achieve investment returns that out-perform debt fees – so minimise debt!
An effective strategy for reducing charges on debt is paying off loans early by paying back more than the minimum amount. This could be your most direct way to saving money, but only 32% of Australians take this approach.*
*Australian Government Financial Literacy Foundation