“Shark Tank” investor Kevin O'Leary has said the ideal age to be debt-free is 45, especially if you want to retire by age 60. Being debt-free — including paying off your mortgage — by your mid-40s puts you on the early path toward success, O'Leary argued.
But when you break it down by age, most carry more than that. Those between the ages of 40 and 49 hold an average of about $7,600 in credit card debt — the highest of any age bracket, per TransUnion data provided to CNBC Make It.
Pros of Living Debt-Free
The price you pay for purchases is the actual price you pay. Since you don't have to waste your hard-earned money paying interest, you'll have more money to direct towards financial goals, travel plans or other purposes.
The average age to pay off a mortgage in Australia is 62, but this should not stress you out. Many individuals throughout Australia are paying off their mortgages just like you.
Here's the average debt balances by age group: Gen Z (ages 18 to 23): $9,593. Millennials (ages 24 to 39): $78,396. Gen X (ages 40 to 55): $135,841.
$20,000 is a lot of credit card debt and it sounds like you're having trouble making progress,” says Rossman.
The ones who are living debt-free may seem like a rarity, but they aren't special or superhuman, nor are they necessarily wealthy. What distinguishes them from people who still have debt is their willingness to utilize the resources they have, financial or otherwise, to pay off debt or avoid it altogether.
How old are first home buyers? The average age of a first home buyer in Australia is now closer to 40 than 20, research released late last year shows. Aussies are, on average, 36 years old when they buy their first home. The average age of first home buyers is, unsurprisingly, linked to the cost of housing.
If you're 55 years or older and interested in taking out a home loan, the good news is that it is possible to take out a mortgage with many Australian lenders. However, you will need to go the extra mile to prove your ability to repay the loan, and there are a few risks you should be aware of before taking on any debt.
If you have a clear plan for how you'll pay the mortgage and you have a good credit score it may be possible for you to get a standard residential mortgage with a 25-year term. Of course, the shorter your mortgage term, the less interest you'll probably pay overall.
You will rarely be able to earn more on your savings, than you'll pay on your borrowings. So, as a rule of thumb plan to pay off your debts before you start to save.
Debt-to-income ratio is your monthly debt obligations compared to your gross monthly income (before taxes), expressed as a percentage. A good debt-to-income ratio is less than or equal to 36%.
According to that same Experian study, less than 25% of American households are debt-free.
Becoming debt free means that you'll be saving more towards retirement. Maintain a monthly budget like you did when you were paying off your debt, but now, instead of sending off those monthly payments to a credit card company or mortgage lender, you're going to put it into savings.
If you have old credit card debt that is still within the statute of limitations, it's a good idea to try to pay it off if you're able.
Research from CreditCards.com also shows more members of Gen X (77%) have any type of personal debt compared with other age groups.
The latest lending indicators from the Australian Bureau of Statistics (ABS) show that the average mortgage size (for owner-occupier dwellings) was $585k in May 2022.
In practice, too, lenders have to be sure that you can reasonably repay the loan. If you're 45-50years of age or over and you can't demonstrate how you will be able to repay a 30-year loan, there is a good chance your application will be knocked back.
If you're receiving a Centrelink benefit, your home loan application will be processed the same as any other: you save a deposit and then borrow money from the lender, which you pay back with interest. However, not all lenders accept Centrelink payments as income and those that do, have a stricter application process.
The average annual salary in Australia is $68,900 and $35.30 per hour. It is just the average salary for basic workers but skilled and experienced workers also earn around $108,980 annually. The average salary also varies depending on the field of work and the job role of workers.
The average salary in Australia: Statistics and trends
The average yearly salary in Australia is 90,800 AUD (USD 60,355). Let's go through a few key indicators of the average earnings in Australia so you can fully understand salary statistics and trends in the country.
an increase in the average age of first-time mothers (from 28.4 years in 2011 to 29.7 years in 2021) a decrease in smoking at any time during pregnancy (from 15% in 2009 to 8.7% in 2021)
A millionaire is somebody with a net worth of one million dollars. It's a simple math formula based on your net worth. When what you own (your assets) minus what you owe (your liabilities) equals more than a million dollars, you're a millionaire. That's it!
Less financial risk
If you are in debt without an emergency fund to fall back on, things can get dicey quite quickly if you suffer financial hardship or job loss. A life without debt gives your budget some wiggle room so that if things go awry, you have a safety net to fall back on that is not tied to debt payments.