Are you suffering from DEBT LAG?

Aussies are a nation of international travellers. In fact, during 2016 a record breaking 10 million residents left Australia to travel overseas on a short term basis*. That’s 41 out of every 100 of us!

We often hear people say “no matter where you travel overseas you’ll run into an Australian”. You can see why!

Of course, the travel bug comes at a cost. Unless you have unlimited funds the more you plan, budget, save and pay towards your trip BEFORE you travel the better off you will be AFTER your holiday.

Nobody wants their dream trip to become a travel debt nightmare. Jet lag we expect – but ‘debt’ lag should be avoided at all costs!

The potential cost of debt lag. A 2016 travel report** claimed Gen Y is the biggest spending generation with a holiday spend of $11 billion pa.

Gen Y is also our new generation of property buyers so it could come as quite a shock to some if their last overseas holiday continues to impact their future financial plans long after their plane lands!

All lenders assess your debt, repayment history and credit report during the home loan application process. A large travel balance could impact both your credit score and ultimately your ability to be approved for a home loan.

If you are a current homeowner you don’t want to find yourself drowning in holiday debt or experiencing an unexpected shift in interest rates that leaves you struggling to meet your repayments.

How do you AVOID debt lag?

Here are our top tips:
• Planning is the key. Create a holiday savings plan well ahead of your travel date. Look for early bird discounts.
• Avoid peak season. Travelling during the off-peak season may deliver extra savings.
• Research exchange rates. If rates are favourable against the $AUD then load currencies on a travel card BEFORE you leave.

Consider ALL possible costs. It’s often the expenses you did NOT anticipate that sink your budget.

Managing debt lag

How can you pay off debt sooner? For one possible option check out Liz and David’s story…
There are a number of ways to manage credit card debt. Paying minimum repayments over a number of years is certainly not one of them.

Contact us for a chat and we can help explore a debt management solution for your individual circumstances.

Whether you are an existing property owner or a potential FUTURE property owner, managing credit card debt will help protect your financial future.

Need help with debt?
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‘Debt got you down? Take action NOW!’

Disneyland almost broke the bank!
Liz and David always dreamed of taking the kids to Disneyland so when their eldest son started Year 6 they decided it was time to bite the bullet and go!
They HAD planned to get on top of their mortgage and then save for a trip. They reviewed their budget and decided if they cut some expenses they could pay for the trip with their credit card and manage the repayments. They estimated the trip would cost $8,000-$9,000.
The first setback was when their hot water heater blew up a week before they left! THAT was an expense they had not planned for. After arriving at Disneyland it soon became clear their 3 day pass wasn’t long enough so they added extra days. Transport was another cost that caught them unprepared.
Liz was also blown away by the cost of food at Disneyland… AND the shopping! Who knew you could buy the kids their annual clothing allowance in America SO MUCH cheaper than Australia? They arrived home from their trip of a lifetime with a $12,186 credit card balance!
Liz and David knew they had to rethink their plan. They chatted to their broker and consolidated their debt into their home loan to take advantage of the lower rate. Then they added their planned repayments (plus any extra)

*. www.afta.com.au.au/AFTA Travel Trends Rort
March 2017
**. Westpac travel report 2016