There is regularly discussion in the media regarding the debt levels of the Australian Government and its impact on the economy. However, with Australia’s average household debt at record levels, perhaps we should also be taking a look closer to home. Household debt in Australia has risen steeply over the last 25 years along with income and property prices.
In 2013 the total household debt in Australia was estimated to be $1.84 trillion, or around $80,000 for every resident. Of course there are many factors to consider when calculating the equivalent debt year on year, such as inflation, asset value, income, interest rates, and unemployment, but what’s clear is a picture of high debt levels attributing to a negative impact on wellbeing for Aussie’s who struggle with debt.
Check out the infographic below and see how Aussie household debt really stacks up.
Source: MyBudget
In a survey conducted by the Australian Psychological Society, 21 thousand adults from all over the nation were surveyed, focusing on the working population in 2013. Overall ‘personal financial issues’ was recorded as the leading cause of stress to working Aussies, which isn’t too surprising considering household debt levels.
Of course managing the stress itself is important in the short term, but tackling the root problem head on could remove this leading cause of stress for many. Making a plan to reduce debt is never the most fun activity for your free time, but could genuinely improve your life; the tips below are a good starting point.
1. Get a handle on your monthly spending by grabbing statements and a calculator.
2. For many, knowing monthly income is simple, for others not so – put a figure on it.
3. Check in with how much you owe and the interest rates for each sum – do you think you can get a better rate by consolidating debt or moving cash around?
4. Take a look over the spending and decide if there are any easy changes that can be made to save. Then take a harsher look.
5. Is the debt too much to tackle – decide if you need help from a debt specialist.
Australia’s household debt is stacking up. So much so that if each dollar owed per household was placed in a stack, it would reach almost 4km into the sky- that’s almost twice the height of Mount Kosciuzko in NSW. Whatever your debt level, no mountain is too high to climb and once at the top it’s always worth the struggle.