Help! I’m 52 and Dead Broke

Question


Hi Barefoot,

I’m 52 with no assets except my old car, as well as $40k debt in loans and credit cards. I earn a good wage and have been working at the same company for 21 years. I was divorced about five years ago and have a dependent child I pay maintenance for, who stays with me every second weekend. I now live with a de facto, to whom I pay rent and half of bills. Should I try to consolidate my loans and cards or put all my money into paying them off individually?

Mick

Scott's Answer


G’day Mick,

I doubt you’ll be able to consolidate your debts, because you have no collateral. So you’re going to have to get rid of them the old-fashioned Barefoot way: ‘Domino your debts’.

Get a piece of paper and write down each of your debts from the smallest to largest. Then (while continuing to pay rent and bills) focus on knocking over the smallest one, then the next, and so on. Live like a monk for a couple of years (devoting $400 a week to this plan) and you should be debt free. Then keep going – but now put that money into super. Then you can really start building some assets.

Scott