Let’s face it: money can be a bit overwhelming! In this episode, Professor Aaron will dive into the world of debt and how it can affect your financial well-being. You can look forward to some friendly chats about financial literacy and easy-to-follow strategies for managing your debt. By the end of the episode, you’ll feel empowered to tackle those money challenges head-on and build some serious financial resilience along the way!
Professor Aaron Gilbert is an empirical finance researcher at Auckland University of Technology (AUT). He is renowned for his contributions to various topics, such as insider trading regulations, culture and finance, market microstructure, indigenous finance, and household finance.
He has a keen interest in enhancing financial resilience and well-being. He explores how financial capability and markets can empower people to make informed decisions about their money.
In this episode, Joahanna and Professor Aaron explore the vital distinction between financial literacy and financial capability. Professor Aaron emphasizes that understanding key financial concepts, such as compound interest, is crucial in making informed financial decisions. Listeners are introduced to valuable resources for enhancing their financial knowledge, ensuring they have the tools needed to navigate their financial journeys effectively.
The discussion then shifts to the different types of debt and their impacts on individuals. Professor Aaron provides insights into common debt reduction strategies, comparing the snowball and avalanche methods. He explains how each method operates and highlights some common mistakes people make in their debt reduction efforts. The conversation also touches on contemporary issues like “buy now, pay later” services, which target younger consumers, allowing for quick access to credit but potentially leading to financial pitfalls.
The episode dives deeper into the consequences of bad credit, including financial exclusion and the challenges of accessing regulated services. Professor Aaron sheds light on the implications of bankruptcy, which can leave individuals “unbanked,” hindering their ability to open accounts with traditional banks. He stresses the importance of proactive communication with lenders and strategies like debt restructuring to manage financial distress effectively.
Finally, listeners are encouraged to consider options such as interest-only mortgages or debt consolidation loans to temporarily ease financial burdens. Professor Aaron concludes by discussing the current difficulties in obtaining credit cards and making larger purchases. He emphasizes the importance of using debt wisely, framing it as a tool that, when managed properly, can contribute to building financial wealth.
In this episode, listeners discover the fun yet essential difference between financial literacy and capability. Professor Aaron emphasizes the power of understanding key concepts like compound interest. You’ll learn about various types of debt and effective strategies for reducing it, such as the snowball and avalanche methods while steering clear of common mistakes.
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