Aussies reveal their biggest money regrets from paying an ex’s debt to not buying property sooner as the Reserve Bank increases interest rates AGAIN
- Hundreds of hard working Australians have revealed their biggest money regrets
- Some regretted taking out joint personal loans or lending money to a partner
- Others wished they’d asked for better salaries or discounts on big expenses
- How has increased interest rates and inflation impacted you? Email [email protected]
Hundreds of Australians have revealed their biggest money regrets as inflation soars and interest rates are put up by a record-breaking 0.5 percent.
From taking out personal loans with a now ex-partner to backing low-yield investments and being too afraid to ask for a pay rise the men and women detailed exactly where they went wrong with their finances.
Posting on the My Millenial Money Facebook Page each person took the opportunity to detail their mistakes and offer advice on how to avoid them.
Hundreds of young Australians have revealed their biggest money regrets as the Reserve Bank increases cash rate by 0.5 percent
One woman revealed she got cold feet and pulled out of buying an apartment on the Gold Coast in 2021 despite having the deposit on hand and a stable income.
‘The apartment has gone up in value by $200,000. Hurts. At least I own a home I guess. Could be worse,’ she wrote.
Another man regretted buying a motorbike instead of a parcel of land in his late teens – noting both were ‘the same price’.
While others were more upset with investments they had made, including one man who racked up an $80,000 HECS debt to become a teacher.
‘I went to a private college that had astronomical fees that you don’t really think about at the time,’ he said.
‘The employment system for teaching is so messed up, that it was seven years into my career before I got Full Time work. This is my 12th year as a teacher and I’m still on contracts with no prospects for a permanent job in the pipeline.’
RBA Governor Philip Lowe (pictured) now has no other way to get cost of living pressures under control after the Australian government handed out more than one third of a trillion dollars in stimulus during the Covid pandemic in 2020 and 2021
Why do interest rates need to rise?
The most basic principle of economics is supply and demand.
When supply outstrips demand prices will fall, but when demand is great and supply is scarce the cost of products will rise.
That’s why something rare and in demand like gold is expensive, whereas something bountiful such as potatoes is relatively cheap.
This rule also applies to the money itself.
Huge Australian government stimulus during Covid totalling more than one third of a trillion dollars – at a time of record low interest rates – has meant there’s more money competing for the same amount of goods and services.
The extra supply of cash is what’s now driving up prices (along with a range of other global factors including the war in Ukraine and supply chain chaos in the wake of the pandemic).
But by raising the cash rate and making money harder to borrow, it should limit the supply of money and help bring down prices.
Cold comfort to those forced to shell out more on their mortgage.
And others agreed their HECS is ‘out of control’.
‘I feel this. So hard seeing that amount waiting in the wings,’ one woman said.
Others revealed their regret at not asking for a better salary.
‘Letting someone pay me minimum wage for two years without a raise working 100+ hours a week capping out at 40 hours because I was so desperate for experience, thinking it was for the best foot forward to get somewhere in my life,’ one man complained.
‘I was too scared my boss would say no and hate me if I asked for more money, so I struggled for years,’ one woman said.
Some regret ‘not asking for discounts’ on expensive purchases.
‘Dentistry-not comparing quotes and work ‘needed’ and generally when l was younger being to shy to ask for a discount of if they could discount,’ one woman wrote on the post.
While others were shocked asking for a discount at the dentist was possible.
‘If this is the case I have been doing it wrong the whole time too,’ one woman said.
Others regretted tying their money up in dead-end relationships.
‘I leant my ex $20,000 of my inheritance and I am never going to see it again but I was young and naive,’ one woman said.
While others were left to ‘pay off joint loans’ when the relationships didn’t work out.
‘He was earning a lot and had bad credit. Promised to pay it in three instalments. He was then unfaithful and when we broke up he left me with the loan to pay. I couldn’t afford it and paid double and a half back on high interest,’ one woman said.
Another woman said she regrets pulling out of an investment opportunity after getting cold feet
‘Been there! Bought a car in my name and then he stopped making payments and refused to sell the car! I had to take the car and sell it,’ added another.
And some said they would have thought twice about getting a pet if they had known how expensive they can be.
‘I got a dog, 12 months and $7,000 worth of vet fees later and all I can say is thank goodness for pet insurance,’ one person said.
Others complained they wasted time looking for properties or putting off renovations that are ‘no longer affordable’ with interest rate rises.
While dozens admitted they ‘didn’t take saving for a house seriously’ until they were aged 25 or 30.
It is the second time the Reserve Bank has increased the cash rate in 11 years – the first was in may when it moved past the record low setting of 0.1 per cent to curb spiraling inflation.
How much you could be paying on your loan in 2023?
How much extra you could be paying by Christmas?
$500,000: Monthly repayments will rise by $442
$600,000: Monthly repayments will rise by $532
$750,000: Monthly repayments will rise by $665
$1,000,000: Monthly repayments will rise by $885
Data is based the Reserve Bank of Australia raising the cash rate to 1.75 per cent by the end of 2022, inline with expectations.
How much extra you could be paying by the end of 2023?
$500,000: Monthly repayments will rise by $652
$600,000: Monthly repayments will rise by $782
$750,000: Monthly repayments will rise by $977
$1,000,000: Monthly repayments will rise by $1303
Data based on the Reserve Bank of Australia raising the cash rate to 2.50 per cent by the end of 2023, inline with expectations.
If banks pass on the most significant rate increase since 2000 in full, the rate rise will add $133 a month on a loan worth $500,000 over 25 years, and $265 a month on a loan worth $1 million.
The Big Four financial institutions, including the Commonwealth Bank, ANZ, Westpac and NAB, all raised interest rates in line with the RBA last month and are expected to do the same again in a move that will make the average homeowner $2000 a year worse off.
Further rapid-fire rate hikes are widely predicted to follow every month until at least the end of the year, as Treasurer Jim Chalmers admitted the cost of living crisis will get ‘harder’ for every Australian.
Economists had widely predicted the cash rate to lift by 0.25 or 0.40 per cent, with the shock move indicating inflation could be even worse than first thought.