Work off your debt

The more interest you pay the less you have to save and the more opportunity you lose to compound your wealth into the future.

Money lenders make money out of debt through interest and time.
The longer interest is paid over time the more the lender makes.

What you can control is the duration of the loan. The quicker you pay back the loan the more you effectively save.

Credit card debt is the most expensive.

If you are behind the curve – merely servicing the debt and not the principal sum then you are in a classic debt trap.
Credit cards are useful instruments if you understand how they work and
Using your access bond to consolidate your debt – its a great piggy bank.

Park your cash in the right spaces

Your access bond charges interest on the average daily balance throughout the month. The bank allocates a portion of your monthly instalment to interest and the remainder to the capital. The higher your average balance is during the month the less is allocated to interest and therefore more is allocated to the capital.
Effectively, you save interest on the rate of the loan.

Credit cards charge interest on the balance outstanding on the card at the billing date. If you pay up your card in full or as much as possible before the billing date then you save the interest for that billing cycle.

So why not leave as much cash in your access bond during the month using your credit card where possible and then just before the billing date transfer as much cash as you can into your credit card?

You have then saved interest on your bond and then had free money from your credit card during the month. Credit cards also have no transaction fees so can be very efficient payment instruments throughout the month.

Avoid the pitfalls of spending more than you earn. You need to be disciplined to always have enough in your bond to cover your credit card balance.