Show Notes
Paying off debt as fast as possible sounds like an obvious financial win. It can mean less interest, fewer repayments, and more money left for you.
But when you have a mortgage, investment debt, personal loans or money sitting in an offset, the smartest move is not always as simple as throwing every spare dollar at the balance.
Which debt should you tackle first? Is refinancing actually saving you money? Could consolidating debt make things worse? And are there some debts you may be better off keeping while you focus your money elsewhere?
In this episode, Paul looks at the decisions that can make the biggest difference to how quickly you get ahead, without falling into the trap of treating every debt the same way.
If you are earning good money but still feel like repayments are swallowing too much of it, this episode will help you work out where your effort could have the greatest impact.
In this episode:
Why paying off the smallest debt first can sometimes beat the mathematically "best" strategy
The reason a lower interest rate can still leave you paying far more in the long run
When consolidating debt can help, and the detail that can completely undo the benefit
Why the debt with the highest headline rate may not actually be your most expensive debt
How your offset account could be doing more of the heavy lifting
The point where refinancing may be worth considering
Why becoming debt-free as fast as possible is not always the same thing as building wealth efficiently
What to consider when debt has gone from manageable to something that is affecting your lifestyle and peace of mind
WANT A CLEARER PLAN FOR YOUR DEBT AND YOUR WEALTH? Paying off debt is only one part of the picture. The bigger question is how your mortgage, investments, super and cash flow should work together to help you build wealth and create more choice. At Guidance Financial Services, we can help you work through those trade-offs and build a strategy around where your money could be working hardest.
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GOT A FINANCE QUESTION FOR PAUL?: Send it to [email protected], and it could be featured in his Ask an Expert column each Sunday in The Age and Sydney Morning Herald.
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UPDATED: This episode was originally published with the wrong episode audio; it has been republished with the correct audio. Thanks for your patience!
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