Business Insurance Overview
23/07/2025
12 Stirling Highway
Nedlands WA 6009
Debt Management
Manage and repay your debts more effectively, through financial planning and budgeting.
A comprehensive debt management plan will ensure you can:
- Make one monthly payment.
- Secure lower interest rates.
- Increase your credit score over time.
- Pay off your debts faster.
Borrowing money is easy these days and that’s why it’s even easier to get into debt.
But, not all debt is bad debt.
Having a debt management plan in place and understanding the difference between good and bad debt could help you make better financial decisions.
Good debt
“Good” debt is when you borrow to invest to purchase wealth-building assets – meaning assets that are likely to increase in value over time and/or give you an income. Good debt may also be tax deductible.
An example of good debt is borrowing to purchase shares or an investment property.
Bad debt
“Bad” debt is a loan used to purchase non-income producing assets and where the interest on the loan is not tax deductible.
Using a credit card or a personal loan to fund a holiday or to buy luxury items are examples of taking on bad debt.
How we can help
Knowing how to manage your debt can help you take control of your financial future and manage your cashflow.
We can recommend a debt management plan to help you pay down your bad debt whilst using good debt to build long term wealth.
Should you borrow to invest?
Borrowing to invest (also called gearing) may help you accelerate the process of wealth creation by allowing you to make a larger investment than would otherwise be possible.
This greater exposure gives you the potential to magnify your returns, but can also magnify your losses.
To discuss your Debt Management needs please contact one of our qualified Financial Advisers at AMA Financial Planning on 1800 262 346.
Frequently Asked Questions
Why is debt management important for medical professionals?
Debt management is a critical component of any financial plan, effective debt reduction strategies can accelerate the repayment of loans, save interest and leave you free earlier, to focus on achieving your other financial objectives. The structuring of your arrangements should also be considered carefully, with a qualified mortgage broker, who will be able to explain lending products designed to specifically benefit medical professionals.
How does debt management impact my long-term wealth creation?
Debt management strategies can help better your long term wealth position by accelerating the repayment of your mortgage (or other loans), so that you’re free earlier to focus on other objectives, such as investing or saving for retirement. Effective debt management can also reduce ongoing interest costs and maximise the tax effectiveness of your lending arrangements.
Can you help set up a budget to manage income and expenses?
Yes, we can work with you to build a cashflow management plan, that goes beyond accounting for your income and expenses, to taking into account your personal spending patterns and mechanisms to empower you to take greater control of your finances.
What’s the difference between good debt and bad debt?
Good debt can help you build wealth, it may assist in funding an education, in the hopes of generating a higher income, purchase a family home or business, for example. Bad debt detracts from your long term wealth position, credit card debt with a high interest rate or debt against a depreciating asset such as a car are prime examples.
How often should I review my debt strategy as my income grows?
As with any financial strategy, debt management strategies should be reviewed regularly. Your circumstances change over time, as does legislation and economic factors, such as interest rates. It’s important that your debt management plan reflect these changes and is adjusted if need be.
