At Lodex we are all about giving you the tools and information to help you make better decisions. In our Insights Series we are reaching out to the experts, thought leaders and futurists to give you the tips and know-how to make the right decisions.
Meet, Martin North, a data-scientist, banking and property expert who gave us fifteen minutes of his time to answer five questions that could save you time and potentially money when it comes to approaching your finances.
Martin, what’s your advice to consumers over the next 12 months?
Only ½ households surveyed have actually done a budget. Stats show that many who are in financial difficulty don’t have a budget at all. Income is static, the cost of living is rising and when interest rates are going up there will be a problem. It is important to build a budget to see where you stand. ASICs money smart website has a good tool – go look at it.
- PRIORITISE HIGH INTEREST DEBT
It is amazing how many people still have significant debt at high interest rates such as credit cards and loans. These will be even worse as interest rates rise. People must prioritise these loans when they budget. People will be hunkering down as nearly a million people are in mortgage stress. 28% of households don’t even have enough money to cover the costs of everyday expresses and their mortgage. Get your finances under control.
- REFINANCING YOUR BEHAVIOUR
There are many attractive refinance deals. Some banks have quite good rates but it is not just the cost involved in doing the refinancing transaction. If you do not change your behaviours, this does not solve the problem. If you don’t change behaviours 18 months down the line you will be in the same position.
- THERE ARE OTHER OPTIONS
I don’t agree with the treasury forecast that income will go up 3%. If your income is stagnant you have to take it seriously and look at how your can deal with the issues. They don’t self correct when income is flat, you need to be proactive.
Banks have an obligation, under hardship clauses to help you find a solution. If you are in financial difficulty it is worth talking to your lender rather than burying your head in the ground. Lenders can:
- help restructure your loan
- change your repayment structure – less principal payment in early years for instance.
- help you consolidate your loans
If you don’t tell them, the bigger the mess will get.
It’s a she’ll be right – She won’t be right.
On Personal & Property Finance Insights: Part 2, Martin North will be answering “What’s your take on the property market?”, articulating his thoughts on the future of Property Market in Australia. Want to receive it first? Subscribe to our email updates. We love to share useful info!
About Martin North
Martin North, Digital Finance Analytics founding Principal, data scientist and banking sector analyst is often quoted in the media. He curates the Digital Finance Analytics Blog, which provides commentary on our research programmes as well as covering broader industry issues. Register to get regular updates.
Digital Finance Analytics is a boutique research, analysis and consulting firm providing advisory services to clients in Australia and beyond. Services are delivered virtually using the web, blogs, social media, online conferencing and other digital means. We also produce corporate education and training videos for some of our clients.