I was recently interviewed by CANSTAR following the release by UBS of its Australian Banking Sector Update, which revealed that household debt (compared to disposable income) in Australia had hit 200%.
Australia is currently 5th in the world with $2.46 trillion.
Australia’s increasing trend in household debt is unsurprising though.
Just look at the low wage growth, increase in house prices and the long-term trends in #ABS data.
The link to my interview: https://www.canstar.com.au/home-loans/household-debt-australia-hits-200-ubs.
Obviously not all household debt is bad.
It can include your mortgage, family car, holiday loans, etc.
Where someone has too much debt to equity or doesn’t have the right budgeting or planning to back up these debts, that’s where people can get into trouble.
If you are facing financial trouble, I recommend:
2. Do up a worst-case scenario budget for the next three months and see how you might fair meeting your debt repayment instalments;
3. Pay off your credit card debt as soon as possible. No one should pay 20%+ interest for anything; and