Something I know all too well, people with debt are really feeling the pain. Something that is just a “given” for a financial advisor is to review debt with our clients, but it always seems to be a surprise to people that we really do go out of our way to help with debt management.
We will review options of putting money into super vs paying down debt vs investing personally. Depending on everyone’s situations and goals this answer will always be different and more often than not is actually a combination of all of them.
Another commonly overlooked factor is economic reasoning. For example, a couple of years ago you could have debt at sub 2% and potentially return 10+% on your investments. Even if invested personally, so paying tax on earnings, you’d expect to outperform your interest quite easily. Now that we are paying 6+% on debt that option is becoming much harder to swallow.
As always these shift all the time so it is one of the great reasons to have an ongoing relationship with a financial planner, as we can review this as changes happen. Better to be active rather than reactive.
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