Young Australian’s Top Stories This Week (June 19)

The Top Stories This Week From A Young Australian’s Perspective.

     1. Minimum wage raises by 5.2%.

What does this mean for young Australians?

On Wednesday, the Fair Work Commission announced that the minimum wage will be increased by 5.2%. From the start of the next financial year (July 1), the minimum wage will be increased by $1.05 an hour. The new minimum wage will be $21.38/hr, up from the current base rate is $20.33/hr.

What this means for young Australians is more money in your pocket. However, don’t get too excited too quickly, as your ‘real wages’ will actually be lower than last year due to the sharp increase in the cost of living.

But at least this increase in the minimum wage by the Fair Work Commission will protect the real value of the wages of the lowest paid workers.

     2. Buy Now, Pay Later debt now considered when applying for loans.

What does this mean for young Australians?

You might soon be finding it harder to get a home loan if you’re not careful. The Australian Prudential Regulation Authority (APRA) has made it compulsory for banks to consider any money owing to Buy Now, Pay Later (BNPL) services as well as your HECS/HELP debt.

While most banks have been including HECS debt in the past when considering lending capacity, the inclusion of BNPL debt will definitely have an impact on your Debt-To-Income calculation (DTI). The DTI determines your lending capacity, or how much money you can borrow.

While services like Afterpay, Zip, and Humm might seem enticing to use, just remember that it could wreck your chance of a home loan.

Also make sure to stay on top of your BNPL repayments to avoid their exorbitant fees.