The debt you *all* wanted to talk about...

Today’s email is sponsored by Betashares

Wow. That got you talking…

Turns out a lot of people want to talk about their HELP/HECs situation.

Here’s what you said:

“I chose to pay it off several years back when I had planned to start salary sacrificing my mortgage and had thoughts of investigating a car lease to access a newer car. However, I left that work place and did not get the full benefit. Now I think I am glad that it is paid off because inflation appears to be rising quickly.”

“Not in a rush to pay it off. I do not consider it as bad debt.”

“I do... but after peaking at just over $40k, it should be paid off by the end of this FY!”

“I have about $50,000 of student debt. Eeek.”

“I skipped Uni and did Tafe instead. Cheaper and in the workplace quicker!”

The deadline to make a voluntary repayment for the 7.1% indexation has passed this year, but this is a hot button topic. Is it a good debt? Should you pay upfront? Should you pay it off faster? Earlier this year, the ABC published the 100 largest HELP/HECS debts - revealing the highest debt is a whopping $737, 000. According to the ABC, this person would be over 200 years old before even getting close to paying if off without voluntary extra repayments!

According to Finder, the average HECS debt is $24, 771 in the 21-22 fiscal year, and 2.9 million people had outstanding debts. The total amount of student HELP debt is $68.7 billion, and the number of people with debts over $50k is close to 10% of all debtors. In a poll Finder placed, 68% of people were concerned about their ability to pay their student debt, and 14% thought they’d never pay it off. According to ANU analysis, the 7.1% indexation added 6 months to the average student’s repayment time.

What should you do?

You’re not tricking us that easily! This email can’t give you instructions for personal financial decisions - we don’t know the ins and outs of your situation and there’s simply no one size fits all answer. But, there is a lot of information to help you assess your own situation, do the sums, assess your financial goals, and make the best decision for you.
Here’s some of the resources - We put this question to a financial advisor on Equity Mates - Ask an Adviser: Jacob McCudden “Should I be paying off my HECs faster? Robin from Vanguard Australia wrote this article for our community, and Money Mag covered this very question. 

How can I save on my transport costs?

Bryce and Ren look at just how much they spend on getting around…

In this episode of "Get Started Investing," we chat about the topic of transportation costs. Whether you're considering major changes or just seeking small ways to save, here’s our takeaways for considering the cost of your transport:

• Do you really need a car? Ren decided to sell his car when faced with a costly repair. Since trading in his car and becoming a "bus guy", he’s saved on fuel, tolls, and car repairs. It’s not for everyone, but it’s worth considering - could you live without your wheels?

• Have you thought about subscription services? Ren introduces the concept of UberOne, a monthly subscription service that offers discounts on rides and food delivery. He’s added up the costs and thinks this service has saved him money and provides a flexible option for those times when public transportation isn't convenient.

• Explore car sharing and ride-sharing apps: Bryce has a GoGet membership and is looking at listing his car on a car rental platform like Car Next Door. This could be a cost-effective plan if you only occassionally use your car - especially for those who have an ABN (no yearly membership fee!)

• Be realistic and think about what you need: If you have kids, work shifts, live far away from your work, you need to factor in those aspects. Budgets need to be realistic and you can’t cut costs from everywhere. Skip a toll bridge? Offer a friend a lift and car pool? That’s a win. Cut yourself some slack.

4 articles that will help you think about $ this week:

• The New York Times: Is it better to rent or buy?

• 80 budget-friendly recipes for everyday cooking 

• 10 people share the best financial advice they ever received

• How to ask for a raise

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Am I saving, investing, or doing enough? These are the questions that keep us up at night, and led to the idea behind our new book: 'Don't Stress, Just Invest'. It's the distilled wisdom of 6 years at Equity Mates, after interviewing hundreds of finance gurus. This book guides you to easily automate your investments, confidently choose your assets, and harness the wealth-creating potential of the market. For those seeking the perks of investing without years of study, this book will set you on the path to peace of mind and financial growth.