You’re One of Us


I’m a single mum of a three-year-old daughter, and I feel financially worthless.

I owe $14,500 on two credit cards, I receive a pension of $1122 a fortnight while I go to university, and I receive no child support (long story). I’ve recently resorted to living with my mother again, who has agreed to help me out. My Mojo account has been drained to pay my car rego, car insurance and my daughter’s kindergarten fees.

What options do I have to get out of this?


Scott's Answer

Hi Lisa,

You’re going to be fine. Really.

When a single mum uses the term “Mojo”, I know I’m talking to someone extraordinary.

You’re raising a kid on your own, investing in your education, and learning about money (better late than never). You’re not worthless — you’re a winner. You just can’t see it yet because it’s too early in the game. So let’s step you through your options to get out of this mess. One option is to declare bankruptcy. Your debts are not secured against any property, so the bank couldn’t come and take your fridge.

You’re already living on welfare, and it’ll give you a clean slate. However, it’ll also limit your employment opportunities, and ruin your credit history. And I don’t think you need to do it — it’s like cutting off your arm to lose weight. Another option is to apply for an early release of your superannuation.

You’ve been on Centrelink income support payments for a continuous 26 weeks, so you should be able to access $10,000 (per year) from your super, though each fund has different rules on whether they’ll give you the loot. But this option is like getting a One Direction tattoo — in a few years you’ll see how ridiculous it is, especially if you continue borrowing, and end up going bankrupt.

No financial tattoos for you.The first thing to do is cut up your bloody credit cards. Today. Second, get a part-time job, a couple of nights per week. You can earn around $180 a fortnight before it cuts into your pension. So, if you’re earning $1300 a fortnight while living with your mum, you should be able to pay $600 a fortnight off your credit cards. By that measure you’ll be debt free in two years.

Cast your mind forward: you’ll have graduated from university, your daughter will be at school, and you’ll be ready to get a place of your own. My final piece of advice is probably the most important: keep a diary (video or written) over the next few years. Talk about your experiences — working in a crappy job at night, living with your mother and studying hard at uni with a classroom full of carefree kids.

When your daughter is older, she’ll get to see the sacrifices you made, and what an amazing woman her mother is.