MY MONEY

Ask Paul: Has debt ruined my financial future at 30?

0
Share on Facebook
Share on X
Share on LinkedIn

By

Published on

Buried by debt and feeling stuck at 30, Christine asked Paul Clitheroe what to do next. His advice starts with one simple habit.

Reader question

I earn $60,000 a year and last year I put myself under a debt agreement.

Christine entered into a debt agreement following some bad decisions. She asks Paul Clitheroe for advice on saving or investing.

I felt it was my last option due to the circumstances at home.

I've made bad decisions in the past and am now straightening things out in my life.

I have decided to put aside money to buy shares as I feel it is a good start in preparing for my future.

I am turning 30 this year and I feel stuck. I need your insight into whether it is a good move to start investing in shares or save my money. - Christine

Paul's response

A debt agreement is not a pleasant experience, Christine, but good on you for taking responsibility.

What is a debt agreement?

A debt agreement is one of two formal debt arrangement options available under Australian law. Also known as a Part IX debt agreement, it is a legally binding agreement between you and your creditors.

A debt agreement can provide a flexible way to settle debts without becoming bankrupt, allowing you to repay an agreed amount over time while creditors agree to the terms of the arrangement.

You have two really big things going for you.

First, you have said you made bad decisions. This is really important. People who say it was all someone else's fault learn nothing.

Second, you earn a good salary and you are only 30.

So by recognising your mistakes, taking responsibility for them and then knuckling down and starting to put money aside is music to my ears.

Frankly, the key issue for me is that you are saving. Shares are a great idea if you plan on holding them for the longer term, say at least seven years.

If, however, you think you might want to save a deposit for a property, then building cash in a high-interest account is a pretty good plan. If unsure, shares are fine.

They may go up or down in the short to medium term but you can always access your money if your plans change.

Get stories like this in our newsletters.

Related Stories

TAGS
,  ,  ,  ,  , 
0
Share on Facebook
Share on X
Share on LinkedIn

Paul Clitheroe AM is the founder of Money and serves as the publication's editorial adviser. One of Australia's most trusted personal finance experts, Paul has spent decades helping Australians build wealth, manage debt and make smarter money decisions. He is widely known for host­ing the Money TV program and authoring best-selling personal finance books. Since launching Money in 1999, he has played a leading role in delivering practical, independent financial guidance to Australians. Paul is chair of InvestSMART Financial Services. He was the founding chair of Ecstra Foundation, a national not-for-profit focused on improving financial wellbeing, from 2018 to 2026, and led the Australian Government's Financial Literacy Board and Financial Literacy Australia from 2004 to 2019. In academia, Paul is chair in financial literacy at Macquarie University, where he is also a Professor in the School of Business and Economics. Ask Paul your money question. Due to volume, Paul cannot respond to questions posted in the comments section.