These money mistakes set Australians back

Almost half of Australians (47 percent) has admitted to making a costly money mistake, with divorce topping the list, according to a new survey by one of Australia’s biggest comparison websites, finder.com.au.

Divorce or separation was cited as Australians’ biggest money mistake, according to the research, affecting 1.4 million Aussies and costing on average $144,774 per person.

The estimated national cost was $196 billion.

The survey found losing money on a property investment was the second most common money mistake, with this financial mishap costing Australians on average $106,104.

Affecting more than 1.27 million Australians, the estimated national loss was $135 billion.

Too much gambling, having children and letting a partner control the finances also ranked among the biggest money mistakes.

Australians’ biggest money mistakes

Bessie Hassan, Consumer Advocate at finder.com.au, says money mistakes can have serious consequences.

“The statistics are worrying. Australians have already paid a whopping $753 billion in money mistakes,”

“Most of these mistakes are irreversible and those responsible are left with tens if not hundreds of thousands of dollars to mop up.”

It’s estimated that Aussies spent $421 million on court fees alone in the past decade, based on the current application for divorce costing $845, and the research from Australian Institute of Family Studies that shows there’s been nearly half a million divorces in Australia in the past decade.

Money Lost

Interestingly, almost 1 million Australians considered letting their partner control their finances as their biggest financial mistakes.

“Money is a very personal topic and two people can have very different ideas on how it should be handled,”

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“These attitudes are shaped from when we are very young and it’s definitely a good idea to discuss finances before getting into a serious relationship.”

Perhaps the most shocking revelation was that 1.1 million Australians believed that having children was a money mistake.

In fact, survey respondents cited this as the costliest of all money mistakes — with expenses averaging $162,456 per person.

“Sadly it seems that people are not planning for the costs of raising children adequately,”

“There’s no doubt that raising children is expensive but to be ranked as highly as gambling is worrying.”

Money savings tips to help get you back on track

• Manage your credit card: The average rate of credit cards is 17.97% and the average balance accruing interest per card is $1971. Paying the balance off over the course of a year would cost you $197 in interest. If

• you were only to pay off the minimum of $50 per month, you’d pay the balance off in five years and be charged over $1000 in interest. Interest free balance transfer credit cards could save you hundreds. Transfer your balance to a 0% balance transfer card and set up a payment play to pay off one twelfth of the outstanding balance per month.
• Maximise savings: The average interest that can be earned on savings accounts is 2.7%. The highest savings rates on the market right now are from ME Bank (3.6%) and ING Direct (3.5%) — both savings rates are available if you also hold a current account with those banks and get your wages paid into those accounts. Switching to the higher savings rate could mean an extra $8000 in interest in eight years.
• Refinance: The average variable home loan rate on the market is currently 5.11%. That’s a record low — but there’s always room to move.Call your lender and ask for a discount. Negotiating a 0.1% rate reduction on a $400,000 loans from the average rate could save you $8829 over the course of a 30-year-loan. Negotiating a 0.25% discount would save you nearly $22,000.

Gender breakdown

Australian women’s biggest money mistakes

1. Letting my partner control our finances
2. Divorce/separation
3. Lost money on a property investment
4. Paying too much for a wedding
5. Having children

Australian men’s biggest money mistakes

1. Divorce/separation
2. Lost money on a property investment
3. Putting it all on black — too much gambling
4. Having children
5. Was caught in an online scam

Originally published at Property Update.