There can be a misconception that debt is ‘bad’ and should be avoided wherever possible, and there’s no question it can lead to financial pain if not used and managed wisely. However, the key is to make debt work for you, not against you. After all, few of us could afford to buy a home or go to university without undertaking some form of debt.
Debt can be a positive and effective financial strategy to help you enjoy a better lifestyle now, since it allows you to purchase goods, services or assets when you don’t have enough funds of your own. Debt can also be used for financial gain by adding scale to your investments.
Your Tribel Financial Adviser can help you to put an effective debt management plan in place, to help get on top of your finances and ensure that you have a roadmap for minimising repayments and reducing your overall debt. This plan may involve exploring such scenarios as:
- Do you have an understanding of your overall debt position and how does this compare to the “average Australian”?
- What strategies are available to minimise the interest expense on your loans?
- If interest rates rise by 2% can you afford to maintain your level of debts?
- If you lose your income can you continue to make the loan repayments?
- How long will it take you to pay off all your debts?
- Can or should you use debt to build wealth?