There’s no shortage of financial advice floating around - from your co-workers and neighbours, to online financial experts, you can find thousands of different methods on how to get out of debt. However, what is rarely taken into account is how everyone is different and therefore, not all financial advice will work for everyone.
For example, having an emergency fund in place that equals at least 6 months of your current income is common advice. But what if you have a lot of credit card debt and you're having trouble making your minimum payments? In this case, having an emergency fund in place would mean that you’re taking money from bills that you’re already struggling to pay. Let’s look at debunking a couple more pieces of financial advice on how to get out of debt:
Remember, no two people have the same financial situation. What makes financial sense for your friend, neighbour or family member may not make sense for you. When thinking of taking steps to pay down your debt and get ahead financially, relate the advice to your specific situation to make sure it makes sense.
Money stressing you out? Learn how to tackle financial stress in this recent post.
It can be expensive to borrow small amounts of money and borrowing may not solve your money problems.
Check your options before you borrow:
The Government’s MoneySmart website shows you how small amount loans work and suggests other options that may help you. https://www.moneysmart.gov.au/
This statement is an Australian Government requirement under the
National Consumer Credit Protection Act 2009.