Here’s a wake-up call

Stop losing sleep over money — you can get help to take control of your finances, writes Sophie Elsworth

IGNORANCE is bliss – but not knowing the real state of your financial affairs can be a recipe for disaster.

Stressed Australians are financially frazzled, losing sleep and finding juggling money time-consuming and tedious.

Financial institution UBank, a subsidiary of NAB, has released its Know Your Numbers Index and found an alarming 86 per cent of Australians are unaware of their monthly expenses. The survey also revealed: are stressed or have loss of sleep about money. per cent accurately know their credit card debt.

per cent use budgeting tools.

The bank’s chief executive officer, Lee Hatton, has urged people to take control of their money and try and improve their financial wellbeing.

UBank chief executive officer Lee Hatton said if you have debts you should know the rates that apply and try and get a better deal.

“About 82 per cent of people don’t know the interest rate on their home loan – how on earth are they expected to control their destiny?’’ she said.

“If you have got debt anywhere, whether it be a credit card or home loan, find a better rate.

“Also think about how much you earn, how much you are putting into your super and where your money is going.” Ms Hatton suggested checking the applicable interest rates on your debt, particularly the most costly of these – credit cards, followed by personal loans and mortgages. There are also plenty of ways to keep on top of your finances including using apps, excel spreadsheets, using a diary to track your finances and also monitoring your banking apps including setting up alerts to help you. Certified financial planner Patrick Canion said your mortgage rate should have a “3” in front but the credit card interest rate isn’t the most critical detail to know.

“With your home loan, your rate depends on how much equity you have, are you a first homeowner or an investor, but if it’s your own home it should have a “3” in front of it,’’ he said.

“What’s more important with your credit card is the interest-free period. The best credit cards have a long interest-free period and you need to be able to pay it off in full.

“But a low card interest rate is more important than frequent flyer points, loyalty programs or concierge services, so look for a low rate.”

“Borrowers will often walk into a bank (initially) but what generally happens after that is they go to a mortgage broker or a provider who offers a range of home loans,’’ he said.

Brokers can sell loans a range of ways – including through branches, mobile lenders and over the telephone.

There are more than 5000 broker businesses operating nationwide.

Scrutiny has surrounded brokers on their commissions made from loan sales, which often includes up-front and trailing commissions over the life of the loan. They must also disclose any commissions they receive from the lenders or any other source to the client.

Consumer finance expert Lisa Montgomery warns customers that before they even talk to someone about a loan, they need to fully equip themselves with information.

“The best research is the research you do yourself, also friends and family will give you advice if they know you are getting a loan,’’ she said.

“Gather as much information as possible and then make a decision to go to a broker and they can offer you a number of products, not just one that a bank can offer.”