Salvos calls on Aussies to reassess their debt

According to the research, almost half of all Australians (46 per cent) are beginning the year in debt and 3.2 million (15 per cent) do not understand how interest works. Additionally, almost one in three (30 per cent) are unable to create a budget for themselves.

These findings come after an expensive Christmas and holiday season for many Australians, with over 34 per cent of people using credit cards and 17 per cent relying on buy now, pay later schemes to fund their celebrations.

Shockingly, 6.3 per cent borrowed money and 8.9 per cent sold personal belongings to afford Christmas expenses in 2024.

“The start of the year is the perfect time to take a fresh look at your finances and plan for the year ahead,” said Kristen Hartnett, head of The Salvation Army’s Moneycare.

“Our research shows that people are really struggling, with the increased cost of living adding extreme pressure on individuals and families across the country, and many find themselves in crippling debt or financial distress.”

The Salvation Army’s Moneycare service offers free and confidential financial counselling, helping thousands of Australians each year to regain control of their finances.

In the past financial year, Moneycare provided 52,000 sessions to individuals struggling with their financial situation.

Of those seeking help, 27 per cent were employed, according to the Salvation Army.

“We have noticed a worrying trend in the past year; Buy now, pay later products have overtaken credit cards as the most common form of debt among our community members, with many using these schemes to make ends meet, paying for items such as groceries and pharmaceuticals,” Hartnett said.

“This is particularly concerning, as many Australians do not view buy now, pay later products as a form of debt, when in reality it can lead to a rapid and crippling cycle of debt due to fees.

“We also want people to know that they are not alone and there is no shame in reaching out. Please don’t delay – seek help early and reach out to Moneycare today.”

The National Debt Helpline recently revealed that 169,000 people reached out to the organisation in 2024, showing a 12 per cent increase on the previous year.

According to Financial Counselling Australia (FCA) CEO Peter Gartlan, these statistics highlighted just how many people are struggling to keep on top of debt.

“The increase in people coming to the NDH for help shows how difficult it is for many people at the moment. Cost of living pressures are mounting and having a significant impact on the financial well-being of many thousands of Australians,” Gartlan said.

[RELATED: Spike in the number of people seeking debt support]

Adrian Suljanovic is a journalist at Broker Daily with more than two years experience reporting on all facets of the third party distribution channel.

Adrian has written for a range of business and finance titles including IFA, Investor Daily and Lawyer’s Weekly before joining the mortgages team in 2022.

He graduated from the University of Wollongong in 2021 gaining a Bachelor of Communication & Media with a major in Digital & Social Media.

E-mail Adrian at: This email address is being protected from spambots. You need JavaScript enabled to view it.