The Elephant in the Room: Let’s Talk About Getting out of Debt

Elephant ARTICLE

Unfortunately, debt can be quite easy to sink into while being notoriously difficult to climb out of. However, with the right information and few handy apps, we know you can work off those debts and learn how to manage your money even better!

First of all, let’s take a look at some facts and stats about debt and money misconceptions. Then, you can discover our great list of apps to help you get out of debt, budget better and save money for a rainy day.

 

Fast Facts and Stats About Debt

In Australia

70.19% of Australian adults own a credit card

There are approximately 16.5 million credit cards owned in Australia

The average credit card debt is $3,181

29% of Australian households are classified as “over-indebted”

The most common types of debt include credit card debt, home loans and student loans

The largest contributors to debt include home loans, property loans and investment loans

Australian statistics originally from here and here.

In America

The average American has 3 credit cards

The average credit card debt is $6,354

There are approximately 1.5 billion credit cards in America

In the first quarter of 2018, 8% of credit card account balances were at least 90 days late

The top two ways consumers are likely to use a credit card include online shopping and online travel

It takes approximately 20 years for the average American to pay off their student loans

People’s peak earning years also tend to be their peak debt years

Including credit cards and student, car and home loans, the average American under the age of 35 owes $67,400, a figure which rises above $100,000 after the age of 35 (then decreases to $66,000 after the age of 65).

American statistics originally from here and here.

Misconceptions About Debt

Smaller debts don’t matter as much: Consumers are often more dedicated to paying off larger debts and tend to be more relaxed about smaller debts, such as phone bills and utility bills. However, small debts can be easily missed and cause problems later on, like bad credit ratings.

It’s better to have a home loan than to rent: Many people believe that rent money is “dead money”, but owning a home carries many of its own expenses, like property taxes and mortgage interest. It’s better to make the decision to rent or buy based on what you can afford and manage in the long-term.

Budgeting is a waste of time: Having a budget can actually help you determine when you’re spending more than what you’re earning and become more responsible with the way you handle money. It’s more than about tracking your money – it’s making a solid plan for your future financial wellbeing.

 

Apps for Getting out of Debt and Saving Money

Pay Off Debt

With this app, you can organize your debts, decide on a plan to pay them off and track your progress. Plus, you can access resources containing information about how to manage debts and pay them off faster! If you really just want to focus on getting your debts under control, then this is the app for you.

 

YNAB (You Need A Budget)

Gain control of your money, set your own goals, import transactions and give your money “jobs” with YNAB. The app will help you prioritize expenditures, handle unexpected costs and live within your means (instead of racking up new debts).

 

Tip Yourself

Luke Carvajal, cofounder of the Tip Yourself app, said that he hoped this app would help people start to see saving money as a reward, rather than a chore. Every time you do something well or hit a goal, you can tip yourself a chosen amount of money. This money can later be transferred back to yourself!

 

Qapital

This app helps you choose goals to save for and determine rules to help you achieve your savings goals. For example, if you need to save $2000 to attend a holiday wedding, you can set the goal and create rules like putting aside a certain amount of money on a day of the week, or spending less on coffee and putting the difference into your savings. If there’s something important you need to save up for, this is the app to help you do it!

 

Trim

Trim can securely connect to your accounts, then analyse your spending and cancel subscriptions you don’t use and negotiate better rates to help you save money! According to one of their users, Trim even helped them re-evaluate their credit card for a new cash back card with a great transfer offer to help them get their balance down.

We hope you enjoyed learning more about debt and how to help yourself get out of debt!

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Articles written by our internal Daily Guru writers, who are certified & qualified growth & development professionals.

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