Professor Antony Young Home Budget Trends

This month we have had the pleasure of interviewing Professor Antony Young. He is a university professor who specialises in cashless societies. He has done extensive work on credit cards and money systems.

Professor Antony Young, could you tell us a little about your history?
I'm currently the Managing Director of the International Institute of Technology. We focus on financial services around the country and internationally. I started my working career working for KPMG, a large firm of chartered accountants.

What sort of trends have you seen in home budgeting?
Most people are becoming more sophisticated with their money than they were in my dad's era. People were a little bit more trusting in the olden days.

But now people are becoming more responsible for their own future, especially with superannuation. We are becoming required to be more responsible. In previous years, we tended to accept what our employers had prepared for us for our retirement.

What are your views and opinions on credit cards?
I have always been very interested in credit cards and have had a great passion for such types of payments. People don't really fully understand the consequences of using a credit card. An example of this is how many people are still paying a high level of interest even to this very day.

If you compare someone like me, due to being a member of professional bodies, the banks will give me free access to credit cards, plus I don't pay annual fees. I never pay interest due to paying it off all prior to the interest free date. Why is this possible, well the answer is other people are not so organised.

I understand why paying credit card interest is so expensive because of the line of work I am in. But how can we expect an artist, ballet dancer or someone not from the industry to be interesting and understand credit cards. I just don't feel people are informed as much as they should be.

People just don't grasp what 20% plus a year interest really means. Credit can get out of hand and it can get out of hand quickly.

In my work, I train a lot of financial planners around Australia. And one of their first strategies as a client is debt consolidation. Just a simple strategy, which is if you have a lot of debt from a lot of different companies, then you should group them all as one debt. Of course you get an overall lower interest rate. This can be such a powerful tool. The funny thing is that even today in 2011, it is almost unusual to come across a client who could not benefit from this.

The global financial crisis hit in 2008, how do you think this changed the way people budgeted?
In a lot of ways, here in Australia we didn't get hit by the full force of it and so not much has changed. Governments kicked spending into overdrive over this time so it cushioned a lot of the blow to everyday Australians.

I think a lot of people stopped to contemplate their home budget more. But at the end of the day not a lot was done.

Thank you, Professor Antony Young for your time.