(03) 9020 2905If January really has a collective cohesion acrossAustralia, it’s sport on the TV.
As if we needed another reason to slack off during the January heatwaves … or to escape shark attacks on our beaches … we’ve got international cricket and tennis running almost from the first day to the last.
Sure, sport is all about strength and endurance and competition and glamour and fun. Blah. Blah.
Let’s face it: Nowadays, it’s about money. Your money. And how to part you from it.
After warmups including the Hopman Cup, today the main game kicks off with the Australian Open inMelbourne.
There’s the megabucks prizemoney, the gazillion-dollar TV rights, and the truckloads paid by sponsors to get in your face using today’s starlets and ageing 80s superbrats such asJohnMcEnroe.
They’re pushing the usual consumer goods – cars, watches, airlines and beauty products.
And the daddy of all consumer needs, money itself. After all, how do you pay for all that … stuff … unless your purse is packing enough plastic?
Spending a wad on sponsorship again this year, we’ve got GE Money – the “official lender of the Australian Open”.
This is the same poor, suffering USlender that’s doing it so hard, they couldn’t afford to pass on any of October’s 0.75 per cent interest rate cut to their home loan customers. Nice work. One of the biggest companies in the world gives customers a big “Thpppppt!”
“Sorry, no rate cut for you. We need the money to get our execs the best seats at the tennis and we need to advertise for more suckers, ah, customers, to fleece.”
Then we’ve got credit card provider Mastercard (which, coincidentally, replaced charge card group American Express as a sponsor).
January is a time when Australian wallets are still spewing smoke from friction through Christmas and the Boxing Day sales Eftpos terminals. The black strip on the back has cracked from overuse. At this time of year, Australianeeds access to more “dumb” credit card debt like the world really needed BillyRayCyrus, his mullet and Achy Breaky Heart.
In the two weeks between the middle and the end of December, Australians do themselves enough financial damage to last them through to February. In 15 days, they often cost themselves three months.
And with the national credit card debt fast approaching $50 billion, Australians would be better off to ignore the pro-credit message and stick to using whatever folding stuff they do have to keep themselves cool with one of three drink sponsors. (I’ll have one of those fancy Dutch beers, please.)
If it’s your credit card that still needs to cool down, the only sort of focus you should have on debt this month is how to pay it down. Certainly not on slick marketing. (“The look on a home buyer’s face when they get the letter telling them they won’t be getting the RBA’s rate cut this month: Priceless.” Sorry to mix the sponsors’ messages a bit, but you get the point.)
By now, most people’s New Year’s resolutions are dead and buried. Hey, it’s too hot to go for a 10k jog anyway. Giving up drinking? How are you going to keep cool when the mercury is stuck above 30?
But it’s never too late to do something about your finances.
First things first. Make a plan to get rid of the “dumb debt”. That’s the debt that neither qualifies as a tax deduction, nor was used to buy assets that will increase in value. This is predominantly credit card debt, store credit and car loans.
(Dumb debt differs from “okay debt” and “great debt”. Okay debt is either a tax deduction or for an asset that will increase in value, like a work car/computer or your home, respectively. Great debt is both a tax deduction and for assets that will increase in value, such as investment properties and share loans.)
There are two types of people in this world. Those who pay off their credit card debt each and every month and those who don’t.
In my experience, those who have the ability to use credit cards as a “free” tool (to put off paying for something for a month or to collect points) are the ones who have the best mindset to escape the clutches of dumb debt and use their cash for some sort of wealth creation. If you’re not the first, that’s where you need to be aiming yourself.
If you feel yourself getting suckered in by some slick financial marketing this month, turn away. Go to the fridge and support one of the other sponsors. While you’re there, another beer to cool me down, please.
Thankyou to all those who entered The West Debt Man Walking Competition from my first column on December 22. Winners should have been sent their copy of Debt Man Walking.
BruceBrammallis the author of Debt Man Walking (www.debtman.com.au) and a licensed financial adviser. Contact Bruce: bruce@debtman.com.au