It’s a new financial year and time to organise your tax return. It’s also time to find extra repayments on your home loan.
Just like a New Year’s resolution, the end of any financial year is the perfect time for a personal money audit that helps you save thousands over the life of your home loan.
Here are the top 10 tips to get your bank account into turbo charge this July.
- Know the interest rates you’re paying on every loan. When was the last time you checked your mortgage? Or, what’s the interest rate on your credit card? It’s important to know the interest rates on every loan so you can prioritise the highest ones and pay them off faster.
- Set a budget and stick to it. Don’t stare endlessly at the credit card bill sitting on the fridge and wonder how you’re going to pay it off. It’s simple – if you’re spending more than you’re earning – there’s a problem. Get a spreadsheet organised that outlines all of your expenses, then work out the absolute priorities for the month. Get smart about the difference between wants and needs.
- Carry cash and use it. You won’t overspend if you use cash. You’ll become a much better saver and become more frugal living in a world where money isn’t easily accessible. Better still, try leaving your cards at home altogether and see how much more conscious you become of your spending.
- Spend less than you earn. Sounds simple, and it is, but people never do it. I’ve repeated this one because it’s a valuable maxim to remember.
- Follow the 80:20 rule. Put 20 per cent of every pay cheque towards your savings and use the other 80 per cent for everything else. Make savings part of your monthly budget by setting a monthly goal and trying to hit it.
- Create a financial calendar. This will help you avoid any unexpected bills throughout the year, however, know that it involves careful planning. Note down when things are due and plan for everything such as insurance, registration, birthdays, holidays etc.
- Find a money buddy. Think of it like a running partner except you swap tips around budgeting and money. It works. Incentivise each other.
- Renegotiate with every service provider. From your utilities to your phone bills, credit cards and home loans. Start making some calls as chances are you’ll get their attention. Threaten to walk away if you don’t get a better deal. The retention teams will be all over you quick-smart. You’ll be surprised at how good a deal you can get if you act like the squeaky wheel; besides, it never hurts to ask.
- Pay attention to fees. This is where financial providers make their profits. Small fees add up, so every time you go to the ATM, or make a purchase using your credit card, think about how it’s likely to cost you. Make sure you read the fine print as there are big savings to be made by paying attention to fees.
- Pay your bills on time. Don’t be late and get slugged with extra charges. Schedule the payments early so you never miss them, even go as far as setting alerts on your phone to remind you. Be vigilant with every bill that comes in and over time you’ll be rewarded for being a good customer. You also don’t want to impair your credit rating as that could come back to bite you later on.
Source: Sydney Morning Herald 20 July 2016