Debt serves as a tool to get us what we want and need today instead of tomorrow. The drawback is that we have to pay it back with interest. Interest can cause us financial issues if not managed in the right way.
There is good and bad debt. Good debt is when money is borrowed with the intent of creating wealth. Examples of which include borrowing to buy an investment property, a business or to purchase International or Australian shares (to learn how go to Borrowing to Invest).
Bad debt is when money is borrowed to buy things which don’t generate any financial returns and are generally spent on wants e.g. technology, holidays or necessary evils like a new fridge.
Unfortunately, debt can get out of control with the accumulation of credit cards, personal loans, car loans and/or a mortgage.
Debt Consolidation
If debts are piling up and becoming difficult to manage we can help to identify opportunities to condense several loans into one loan that is easier to handle financially.
As well as helping to reduce debt we can also take a look at your expenses in their entirety. We can help identify opportunities by looking at your total financial position, assets and liabilities, to better allocate your resources for debt reduction. The benefit of paying your loans out quicker includes saving on interest, frees up cashflow and improves your lifestyle by making pay cheque to pay cheque a little easier.
To learn more about managing cashflow go to Budgeting and Cashflow Management.
For debt consolidation advice contact our mortgage broker and arrange a meeting 02 4038 1623.