The latest official interest rate rise has already made some borrowers realise they’ll have to tighten their financial belts if they’re to be prepared for more rate rises later in the year.
And there are several ways to improve your household cash flow, so you can lessen the impact of higher mortgage repayments when it does eventually happen:
1. CREDIT CARD CLEAN-UP
If you’re still suffering the impact of over-spending from the summer quarter, now is the time to buckle down and start whittling that credit card balance back down. Paying unnecessary interest of around twenty percent on some cards should be enough to jolt you into action.
2. MORTGAGE MAKEOVER
Look at your current mortgage and see if you can work with its existing structure to make further inroads into your repayments. Paying more off each month, changing to fortnightly payments instead of monthly and re-assessing the loan features can save you significantly over the long term.
3. TRIM THE SPENDING
Until you write down what you actually spend, it’s difficult to know where you can trim the fat but keeping a spending diary for a month will often give you a surprising indication of where all your money goes. Everyday expenses such as groceries, petrol, entertainment and clothing can all benefit from an effort to shop around and get the best deal to keep more money in your pocket.
4. PLAN AHEAD FOR EXPENSIVE ANNUAL EVENTS
By regularly putting a small amount of money aside for longer term or annual events such as holidays and Christmas you can avoid the hangover effect one event can have on your finances for the rest of the year.
5. SHOP AROUND FOR BETTER INSURANCE PREMIUMS
Once you combine the costs of private medical insurance, car insurance, home and contents insurance over the year – it all adds up. But by shopping around insurance providers to see if you can get a better deal, even a ten saving can free up hundreds of dollars over a 12 month period.
Tags: Budget, Home Loan, Home Loans, Interest Rates, rate rise, variable rate