June 26, 2018

‘Til Debt Do Us Part

Category: Financial Freedom
I heard a frightening statistic this week: that our national debt level is 130 per cent of our GDP (gross domestic product). Quite simply, as a nation, we are racking up debt faster than we are producing.

Or, in old fashioned terms, we are spending more than we earn.
Anyone knows in managing their own budgets, that spending more than you earn ends badly. Usually with a diminished lifestyle as you need to sacrifice in order to pay back what you are have already spent. If you can…

Another equally disturbing statistic is that 30 per cent of households are responsible for 85 per cent of household debt. Wow – this is a big spending 30 per cent of our population.

No doubt it’s what’s been driving property prices up in major cities like Sydney and Melbourne. Combined with the fact that 40% of bank loans have been interest only (although the government is now decreasing that to 30 per cent,) this means that only a few factors in the combination need to change for a series of cascading events to occur.

Reading big picture statistics like this can sometimes paralyse you with fear and a feeling of “what can I do?” It’s obvious we can’t change the habits of a whole nation, but what we can do is think about our own situation and make a checklist for the what if happening.

 

What if interest rates rise? What if house prices drop? What if another GFC came into play? What if you lost your health? What if you lost your ability to work? What if your business failed?

Bear with me; I am not trying to put you on a downer, what I am trying to do is give you a sleep-at-night feeling. Because if you have answers, plans and assurances around all these questions, then you won’t be caught out if circumstances change.

Chances are you do have a plan already. But the household debt tells me that many Australians are used to a good economy and prosperous times; which at times can mean that the worse is not planned for or taken into serious consideration as it has not been needed previously.

If you don’t have a plan, perhaps it’s time to see a financial adviser. If you don’t know one, start with a search on the FPA website and ask them these questions:

  • Are you a Certified Financial Planner (CFP)?
  • How do you charge?
  • What do you specialise in?
  • How will we work together?

If you find the answers are to your liking, it just may help you answer those what ifs, and sleep better at night. For if the whole nation is not covered, at least you and your family are.

Leave a Comment

  • From Kids Debit Card on Changing Conversations You Need to Have with Your Kids

    The goal of the following article is to assist parents have meaningful conversations with their children about money and financial literacy by providing them with practical guidance and useful recommendations. The author discusses goal-setting, budgeting, saving, and investing, and offers advice on how to have these discussions with people of varying ages. The essay is informative and easy to read, making it a valuable tool for parents who want to teach their children about money.

    For More Info:-https://busykid.com/kids-debit-card/

    • From admin on Changing Conversations You Need to Have with Your Kids

      Thanks for your comments!

  • From Gale Pickles on It Was the Best of Times, It Was the Worst of Times

    So enjoyed this, I will share if that’s okay with you, many of my friends will benefit from your journey.
    Many Blessings for 2023
    ♥️♥️♥️♥️♥️

  • From ScottViabe on Three ways to embrace change to improve your life

    Hi all! This is a good site.

  • From David Horton on How Finfluencers are teaching millennials and Gen Z about money

    And once again the regulator finds a way to stop ordinary people from getting advice by placing high costs on people who do the right thing. If a finfluencer is actually trying to scam someone, it would not be hard to operate outside Australian jurisdiction.

    • From admin on How Finfluencers are teaching millennials and Gen Z about money

      They definitely have a place. People need advice and many are working on it to be more accessible. Watch this space!

  • From Camelia on IT'S NOT TOO LATE FOR YOU

    It’s never too late to learn something new and to start all over again. Unless you’re dead, you can do it.

    • From admin on IT'S NOT TOO LATE FOR YOU

      So true

Each day I wake up excited to inspire everyday people to open up and take control of their money, regardless of their history, goals, or savings amount. About Vanessa >>

Book

Discover a new way of seeing
life & money.

Download the first 3 chapters for free

Download

Related Articles

Alarming Financial Stress Among Australian Employees: How Business Leaders Can Make a Difference

Recent statistics reveal a troubling trend: almost 1 in 2 Australians struggle to pay for regular expenses like rent and food before payday, 3 in 4 have difficulty budgeting each month, and a staggering 90% have outstanding short-term debt. This...

Five Ideas to Help Ease Financial Stress

Financial stress can weigh heavily on our minds, impacting our overall well-being and happiness. However, there are steps we can take to alleviate this burden and pave the way for a more secure financial future. Here are five practical tips to help...

The Silent Struggle: How Financial Stress is Taking a Toll on Mental Health

  In a world where the cost of living seems to skyrocket by the minute, the silent struggle of financial stress is taking an undeniable toll on people’s mental well-being. As someone deeply invested in financial literacy and well-being,...

The real cost of money worries? More than a penny for your thoughts.

  Angie was nestled amongst the cushions of Nick’s luxurious sofa, wrapped in his plush bathrobe, a temporary substitute for his embrace as he took to the kitchen to brew a perfect mug of coffee. She loved that recently, Friday...