Aussies tighten their belts

Half of all Australians have tightened their belts in recent months because they fear the impact of higher interest rates. The Reserve Bank kept official interest rates on hold this week, but the RBA has warned borrowers that its bias is toward more tightening of monetary policy.

Westpac chief Gail Kelly said on Wednesday that higher rates were inevitable. As a result of this fear, half of all Australians are not eating out as often, 47 per cent are reducing costs at home or taking lunch to work and 42 per cent are going on cheaper holidays or not taking a break at all.

According to new research from Bankwest and the Mortgage Finance Association, the number of borrowers feeling ‘worse off’ now compared with 12 months ago has been steadily increasing since November 2009. Seniors, homemakers, students and the unemployed are most concerned about the future. Getting on top of the plastic first is a key recommended strategy for anyone thinking that their repayments could rise.

Source: Sunday Mail