Don’t over-extend yourself
Research shows we tend to:
- Be over-confident of our debt repayment ability
- Underestimate likelihood of things going wrong
Causes of mortgage stress
- Looked at ‘mortgage stress’ triggers
- Did surveys and interviews
- Assessed ‘initial’ and ‘final’ causes of missing repayments
- Typically more than one reason
Investing for children
- Start early and give them a head start
Make the most of super
Get the basics right
- Track down ‘lost’ super
- Consider merging multiple accounts
- Review where super is invested
- Consider time frame when selecting investment option(s)
- Stick with a well considered investment strategy
Protect your family
What are the possible consequences if die or disabled?
Where suitable plans not made
- Sell or downsize home
- Non-working spouse returns to work
- Working spouse takes second job
- Children may need to change schools or schooling arrangements
- Cut down on luxuries eg holidays
Source: Understanding human behavior in financial decision making: Some insights from behavioral economics. Paper to accompany presentation to No Interest Loans Scheme Conference “Dignity in a Downturn” June 2009. Ian McAuley, Centre for Policy Development and University of Canberra Source: Mortgage default in Australia: nature, causes and social and economic Impacts. Authored by Mike Berry, Tony Dalton and Anitra Nelson for the Australian Housing and Urban Research Institute, RMIT Research Centre, March 2010