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If I Was 25 Again... I Would Pay Off My Credit Card in Full Every Month!

While convenient, credit cards can be a real trap. Touch and go technology in particular makes it easy to spend without thinking of the growing debt.

If not paid off in full within the interest-free period each month the carry-over balance will start to accumulate interest at well over 10% pa, sometimes up to 20%, magnifying the debt and making it harder to repay.

Instead I’d use that interest-free period to my advantage. Paying all of my expenses with the same card would allow me to keep my cash in a higher interest account or mortgage offset account and earning (or saving) valuable interest until the credit card payment date. Or if I was too easily tempted, I’d either reduce my credit limit or use a debit card to help make sure I didn’t spend more than I could afford. My credit rating would love that!

Paying off a credit card in full each month, is a great start to financial freedom however it may still not be enough to get ahead. You may not be spending more than you earn but everything you earn is getting spent? If this sounds like you or someone you know keep reading...


If I was 25 again... I wouldn't think thrifty was such a negative word.

The word “thrifty” is rarely thought of in a positive sense but that’s not fair because if we continually spend more than we earn, our debts will eventually catch up and other words such as “default” or “bankrupt” might become more familiar.

Being thrifty doesn’t mean doing without – quite the opposite. Here are six simple tips to build up your savings.

1. Create a Budget and Stick To It

Before you can get your spending under control you need to know exactly how your income compares to your expenses. There are many free online budgeting tools available, such as the MoneySmart Budget Planner found at www.moneysmart.gov.au.

There is also a multitude of smartphone apps that can help you to record everything you spend. This can be an interesting exercise. At the end of every month, you can easily compare your total purchases and outlays to your budget. You might be amazed to see where your cash is actually going.

2. Be Debt Smart

Make a list of your debts and organise them in order of annual interest rate. Those with the highest rates (most likely your credit cards) should be paid off first, especially as the debt is not tax-deductible. It rarely makes financial sense to invest money to receive 5% per annum while you are paying credit card interest of 20% or more.

3. Time For a Mortgage Check-Up?

Like all things, mortgage products change – particularly with lenders adjusting interest rates. If you are more than five years into your mortgage, it could be time for a review. Check with your lender to ensure you’re getting their best rate. You might be astonished at the deals lenders are prepared to do to keep your business.

4. Get Creative in the Kitchen

Have you looked deep into your kitchen pantry lately? At least once a week gather up the household and get creative. Brainstorm how to use some of the existing ingredients from your pantry and fridge (those that are still edible!) in new and different ways. This creative exercise will not only be fun, but will save on your grocery bills.

5. Switch and Save

When was the last time you compared costs on your home/health/car insurance, phone plans, gas and electricity? By shopping around and negotiating a better deal you could save significant dollars on your monthly spend. There are helpful websites to make comparison shopping much easier but be aware that they only list providers who have paid to be promoted on their sites.

6. Be Organised!

Most people are amazed at how many gifts they buy each year, often at the last minute. By establishing a gift list and allocating a set budget for each recipient well ahead of time, you can progressively buy gifts on sale during the year. This will certainly help your cash flow and circumvent overspending by avoiding that last minute rush.

As you watch your bank balance increase, enjoy the feeling of being in control and knowing you can have whatever you want with just a little discipline. If you have any questions on any of the above points please feel free to get in touch and speak to one of our advisers.

If I was 25 again...

Toowoomba Financial Centre Pty Ltd ABN 88073088070, trading as TFC Financial is a corporate authorised representative of Charter Financial Planning Limited ABN 35 002 976 294 Australian Financial Services Licensee License number 234665. This article contains general advice only. You need to consider with your financial planner, your investment objectives, financial situation and your particular needs prior to making any strategy or product decision.


Phone:  (07) 4639 1399

Fax:       (07) 4639 6921 

Office:   Canberra Place 123 Margaret Street

              Toowoomba QLD 4350

              (Cnr Margaret & Hume Sts)

Postal:   PO Box 1591, Toowoomba QLD  4350


Toowoomba Financial Centre Pty Ltd ABN 88 073 088 070, trading as TFC Financial is a corporate authorised representative of Australian Financial Services Licensee 234665, Charter Financial Planning Limited ABN 35 002 976  This website contains general advice only. You need to consider with your financial planner, your investment objectives, financial situation and your particular needs prior to making any strategy or products decision.

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