• Angela Dye

Easy tips to help put you back on top of your personal financial position

Updated: Jul 29

You can take control of your finances and you don't need a finance degree to do so.

Many of us don’t give a second thought to the question - what state are my personal finances in? We live week to week, going through the motions of paying bills and often feel like we are getting nowhere financially. We are inundated with information on TV and radio containing jargon-filled reports of increasing tax, inflation and budgets. We also hear about the power of the big four banks.

So, you would be forgiven for thinking you have no control over your money, but here is a revelation for you — you can take control and you don’t need a finance degree either. You just need to be aware of several small things that you can easily do to help yourself and get on the path to financial control.

Tip #1: Spending v Income

The first tip is to understand your spending versus your income. If you spend less than you earn all’s well and good, but if you spend a lot more than what goes into your bank account, it is imperative you consider where you can reduce your spending.

A good place to start is to write down everything that you spend so you have a clear idea of where your money goes. You can then think about if you really needed to buy lunch when you could have made it, or if you really needed those extra shoes.

Remember, be honest when listing your expenses and don’t leave anything out, even the sneaky coffee you grab before work each morning. You will be surprised at where you can make savings.

Tip #2: Get your mortgage reviewed

This one easily falls by the wayside but could possibly be one of the most beneficial tools to help you gain control of your finances — get your mortgage reviewed every two years. Home ownership and investment laws change all the time and you need to make sure that the product you signed up for is still the best one for you. Consolidate your debt where you can, giving you one monthly payment instead of having your money going out in every direction. Using the right product could save you thousands.

Tip #3: Pay down your debt and use an offset account

You can reduce your debt considerably by having a customised flow of money. Use your savings to help decrease the interest on your mortgage by using an offset account and that way your money works harder for you. Your monthly interest will reduce and you still have access to the funds if you need them.

For example, if you have $10,000 in savings sitting in your bank account and you have a $500,000 mortgage that means you are paying interest on the $500,000 balance. If you transferred your $10,000 to your mortgage or offset account and have it sitting there as available redraw, you will only be paying interest on $490,000.

Interest on home loans is charged monthly but is calculated daily so each day your $10,000 sits in your home loan the less your interest payment will be at the end of the month. Compound interest can work for you the same way it works for the banks.

Tip #4: Don't get anxious over interest rates

Be careful of getting caught up in the hype and anxiety of increased interest rates; think independently, consider what is outside the square and be a rebel, but be an informed one!

Tip #5: Don't ask the butcher for a haircut

Get a good understanding of the professionals around you and how they can support and help you. You wouldn’t go to the butcher to get a haircut, so why would you take financial advice from someone who is not an expert in their field?

If you would like to help to take control of your finances ask Ang. Book a call or appointment.

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