The New Year has begun, and it gives us a great opportunity to look at where we sit financially and how we can improve our finances for the coming year.
Last year we saw interest rates rise eight times along with the cost of living, increasing food and amenities costs rising considerably, putting extra pressure on households. This was leading into the festive season which brings extra costs with presents, food and family holidays.
Q: How can we do things better this year? What do we need to do to improve our situation moving forward so that we have a better understanding of what we can achieve?
A: We need to take control of our finances.
We need to review our home loan
A review of your home loan and unsecured debt, that is credit cards, personal loans and buy now pay later schemes, can help us to understand what we can change to give us better use of our after- tax dollars. Separating your money across different areas reduces your money’s power. It can also add unnecessary fees and charges. By consolidating debt, we can become more effective in how quickly we reduce our overall debt.
What about rising interest rates?
Interest rates rising within the mortgage industry is a normal process. They rise and they fall over time. Many mortgage holders today may not have seen interest-rate rises like we have seen over the last few months, however the rates will change both up and down throughout the lifetime of your mortgage. It is important to know how we manage these increases.
Reduce unsecured Debt
One thing we can do to help reduce the effect of future interest rate rises is to try to have as little unsecured debt sitting outside our mortgage as possible, this will help to reduce the drain on our cashflow.
Develop a financial strategy
With a good financial strategy that teaches you how to flow your money correctly through your mortgage you can achieve the benefit of paying your home loan off quicker than the 30 year mortgage contract you would have with the bank. This type of strategy can help reduce the overall amount of interest you pay on your home loan.
And again, review your home loan
Even if you feel in control of your finances and your future plans, it is still good to have your mortgage reviewed every couple of years. Laws, policies and the banks requirements constantly change and if you are like any normal family, situations and events that need unplanned dollars frequently sneak out of left field to surprise you and keep you on your toes.
Get help from qualified experts
Finally, always ensure the professionals you ask for support are qualified experts.
Contact Angela Dye on 0414 608 970 of Richmond Residential to discuss reviewing your home loan and the steps to take control of your finances. or book a call or meeting through the links below.