Australians are finding creative ways to save on their home loan, and other areas of financial life.
We’ve spoken about shopping at the right stores and finding cheaper ways to entertain the family over the holidays.
But we feel now is a good time to get back to foundations.
Saving more on your home loan isn’t just about finding the right interest rate; it’s about the big financial picture.
Here are the 5 areas to consider when you're giving your finances a once over.
- You’d think writing down what you spend would be easy. That’s essentially what tracking your budget involves. But for most Australians, money is an emotionally charged issue.
- It makes sense that we find it hard to record what we spend, as we first have to confront that we are spending.
- We don’t have any tricks for making this easier, but we can tell you that taking the first step is the hardest part. Consider using a budget tracker like this one from ASIC.
- After a month, you are bound to see where you could save more, and in many cases, it may be as simple as cutting down on takeaway coffee.
- Once you have worked out what you do spend, your next step is to spend less than what you earn. Sounds simple. Right?
- Most people have a credit card, but only a small percentage of people pay it off every month. (Head to point 3 if you are one of them!)
- If you’re not, consider taking the debt head on and paying it off over a few months, or just pay the minimum 3%.
- If you choose to pay the minimum, you could rack up thousands in interest, depending on what you owe.
- We recommend tightening your belt for a little while and avoiding the extra cost.
3. Home loan
- Interest rates are at record lows right now. This is a perfect opportunity to pay off as much debt as possible – especially if you have purchased recently and have a big loan.
- Making fortnightly repayments, instead of monthly repayments, will also fast track your savings when rates are low.
- It’s surprising how much you can save with the right approach to super. You will save more on your super if it is in your own name, especially if you start young.
- Of course, it’s never too late to get started, so talk to a financial adviser for support around this. (We can refer you to a financial adviser if you like.)
- It may feel like you’re pouring money down the drain – until you need to make a claim.
- Plenty of people do end up claiming in their lifetime, especially when it comes to home and contents insurance.
- Income protection is another important form of cover to consider. It’s generally tax deductible, so after tax, it costs around the same as insuring a vehicle.
If you’d like to save more on your home loan, our mortgage brokers can perform a home loan health check, free of charge. Talk to us to get started.
For more tips on boosting your financial health, head to the Australian Financial Review.