More Australians are choosing to forgo holidays and other luxuries in favour of paying off debt, according to a new survey by homeloans.com.au.
The group’s 2015 Tax Refund Survey revealed that over half of respondents who expect to receive a tax refund this year will use it to reduce personal debt more than anything else.
Approximately 35 per cent of respondents said they will put their tax return towards non-mortgage debt such as credit cards, while almost a quarter said they will put it towards their mortgage.
Will Keall, national marketing manager at homeloans.com.au, said the results are pleasing as they show more Australians are attempting to get their finances under control.
“We applaud that, because the pathway to housing affordability is significantly smoothed if people can approach a potential lender with a proven ability to repay debt. It also helps people to save for a home deposit if they can put the money they would otherwise pay on credit card interest repayments into the bank instead,” he added.
The survey revealed that the younger generation are particularly cautious about paying off debt with their tax return.
A third of respondents aged 18-24 years old said they plan to invest or save the money, while a quarter plan to put the refund towards personal debt.
The remainder of this demographic said they plan to use their tax return for a home deposit or to reduce their mortgage.
“This is the generation born after the 1990s and these results reflect their more prudent approach to life,” Mr Keall said.
“But that doesn’t mean they’re all work and no fun. This is also the group that more than any other has plans to travel, with more than a third telling us that they would use their expected refunds for a holiday.”