We are facing some very significant challenges as a nation and some families are doing it harder than others. Interest rates are climbing, and the cost of living pressures are taking their toll, not just on our bank balances, but also on our relationships and marriages.
Vision has partnered with Brett and Kate Ryan from Focus on the Family, and Alex Cook, founder of Wealth with Purpose to bring you a special Marriage and Money seminar live-streamed at Vision’s Brisbane studios and hosted by Neil Johnson from 20Twenty.
It’s not just couples who can benefit from the valuable insights and expertise shared by Brett, Kate and Alex; everyone will find gold nuggets of wisdom in this seminar series they can apply to their lives to help them make sound financial decisions and build strong relationships.
Post Pandemic Financial Stress
Alex Cook says: ‘In the last 30 years, Australia has been amazingly prosperous. We’ve had rising house prices, and a rising stock market. Everyone’s used to seeing those kinds of things as normal. But really what’s happened over the last 30 years is we’ve had cheap money. Back in 1990, home loan interest rates were at 18%, so it’s hard to believe that a year ago you could get a loan for under 2%, which sucked a lot of people into the housing market.’
Once inflation hit the world we experienced the fastest-rising interest rates in the country’s history. Those with a principal and interest home loan have seen a 45% increase in their home loan repayments. That’s a huge amount of extra money to have to come up with every week, all of a sudden.
Renters have also experienced around a 10 to 11 per cent increase in rents across the nation. So on top of rising energy and food prices, it’s a significant financial pressure that’s been put on people in a short space of time.
Neil pointed out that while home loan interest rates have been at an all-time low, compared to when they were 18%, the difference was that back then people didn’t have mortgages between $500,000 to $1,000,000 as they do now. The current level of household debt in Australia is the second highest in the world.
‘We’re probably carrying at least four times as much debt as what we were back then. So it’s an enormous issue now because as rates rise, it’s just basically sucking up people’s incomes,’ said Alex. ‘According to research done by the Reserve Bank, a couple of weeks back, they’re saying that just one more rate rise from here will mean that 20% of mortgage holders will have negative cash flow. That means they’ve got to choose between putting petrol in their car, or food on the table. They question if they can afford to pay the kids’ school fees. People are now faced with having to make decisions they haven’t had to make in the past.’
The Effects of Financial Stress on Marriages
Financial stress also compromises people’s health. ‘When they have to choose between buying medicine or going to see a specialist, the domino effect is not just on marriages or relationships, it affects people’s mental and physical health,’ said Brett.
Neil mentioned the embarrassment and hurt parents experience when their bills are rising every week and they can no longer afford to send their children to private schools. The flow-on effect is also seen in rising crime rates across the nation.
‘The one thing I’ve noticed is that parents are starting to feel like failures because they feel they can’t provide or keep their children in their private schools,’ said Kate. ‘But, it isn’t the end of the world if a child doesn’t go to a private school. A child can have a good experience at either a private or government school if they are encouraged to make the best of it.’
Neil pointed out that there could be a lot of worse-case scenarios than having to change from a private school to a state school such as not being able to afford groceries or the threat of eviction when you’re getting behind with the rent. Some people have lost their homes and are living out of their cars, or worse still, out on the street.
‘Homelessness has increased,’ said Kate. ‘It’s a sad reality that there are some families with children living in their cars. We can only imagine the feelings of hopelessness they are feeling. These people need to be reassured that there is hope and help for them. We need to reach out to those people who are struggling on that level and have found themselves in this situation.’
If you are experiencing hardship, marriage or financial stress, there is hope and help. You can find helpful resources on the Focus on the Family and Wealth With Purpose websites by clicking the links. You are not alone. You can also contact the Vision Prayerline for confidential prayer from our caring Prayer Warriors.
To view the full Marriage and Money seminar, click on the link below. The topic of Financial Challenges begins at the 9:20-minute mark.