From car payments to credit cards and student loans: Barefoot Investor shares everything you need to know about bouncing back from debt in 2021
- Finance expert Scott Pape revealed how Australians can overcome debt in 2021
- The Barefoot Investor said Australians should focus on car and credit card debt
- He urged struggling Australians to seek help from free financial counsellors
- Mr Pape also said repaying student debt in Australia would ‘look after itself’
Finance expert Scott Pape has demonstrated how Australians can bounce back from debt in 2021.
Mr Pape, also known as the Barefoot Investor for his best-selling financial advice books, revealed a guide for Australians to overcome the coronavirus pandemic.
He shared a series of steps and advice to ‘Domino Your Debts’ and warned that ‘Australians are drowning in debt’ after a 30-year-long economic boom.
Mr Pape discussed student debt, car loans, credit card debt and credit history as key areas of interest, The Daily Telegraph reported.
Finance expert Scott Pape (pictured left with wife Liz) has revealed a guide for how Australians can bounce back from debt and the coronavirus pandemic in 2021
Mr Pape, also known as the Barefoot Investor, said Australians should let their student loans ‘look after itself’ and focus on paying off car loans and credit card debt (file image pictured)
He urged Australians to avoid stressing over their student loans and said ‘it’ll look after itself’.
‘Your HECS-HELP debt is not charged an interest rate. Instead, each year on 1 June it’s indexed to the cost of living,’ Mr Pape explained.
He said Australians should instead aim to ‘get rid of’ their car loans.
‘I’m deadly serious. Don’t pay interest on something that’s rapidly falling in value,’ Mr Pape explained.
‘My rule of thumb is you shouldn’t drive a car that’s worth more than half your annual income.’
He also advised choosing ‘the one with the smallest balance’ when paying off credit cards.
Mr Pape also urged Australians to directly contact the companies they can’t pay afford to repay their loans to and seek help from a financial counsellor (file image pictured)
He said Australians should check their credit score (file image pictured) annually
THE BAREFOOT INVESTOR’S ADVICE FOR OVERCOMING DEBT
1. Let your HECS-HELP student loan ‘look after itself’
2. Repay your car loan ASAP
3. Pay off the credit card with the smallest balance first
4. Only consolidate debts through an official source like bank or credit union
5. Annually check your credit file
6. Contact the company you are struggling to repay debts to
7. Speak to a financial counsellor
Mr Pape said Australians who consolidated their debt should ‘only do it through a bank or a credit union’.
He warned Australians to annually check their credit file.
‘Don’t get all freaked out about it. Treat it like an annual sexual health check,’ Mr Pape said.
He urged taxpayers to call credit reporting agency Equifax on 13 83 32 and request a copy of their credit report during tax time.
Mr Pape also urged Australians to email the hardship department of any company they couldn’t afford to make loan repayments to.
‘By telling your story, you instantly become more than just a number — you’re a real person,’ he explained.
‘And by putting it in writing, you’ll have an official record, which will come in handy when you get help.’
Mr Pape explained Australians should then book an appointment with a not-for-profit financial counsellor.
‘A financial counsellor will work with you to help put you back in control,’ he said.
Australians can contact the not-for-profit National Debt Helpline on 1800 007 007.
Mr Pape said any struggling Australians can contact the not-for-profit National Debt Helpline on 1800 007 007 (file image car loan pictured above)