Becoming a better budgeter, wising up on spending and making the most of any savings can help you master your mortgage and own your home outright sooner.
Indeed, if your goal is to pay off your home loan sooner, there really is no better time to start than today. Best of all, becoming a savvy saver doesn't need to be hard – there are a few easy steps that you can follow to help you become a better budgeter.
Step 1. Become best buddies with your budget
If you don't already have a budget, now is the ideal time to start one. Ensure it factors in all your regular spending – home and/or other loans, utility bills, medical expenses, memberships, grocery bills, insurance costs, etc. Don't forget to include funds for socialising treats. Be honest with your budget and refer to it each time you contemplate a new expense.
Step 2. Slash your cash limit
Consider ways to cut your daily spend. For instance, a daily caffeine hit at $4 per weekday equates to $80 per month. Did you know by making a coffee an every-second-day spend and contributing $40 extra per month to your mortgage from day one (based on a $300,000 loan over 30 years at 6%) you could reduce the total loan term by almost 2 years?
Step 3. Review your health insurance
With health insurance premiums set to rise in April this year, there really is no better time to review your current health insurance policy. By reviewing your health insurance policy, you may find that you not only paying for extras you don't need, but you may also find there is a cheaper policy that is better suited to your needs both now and into the future. Health comparison sites like www.helpmechoose.com.au can help you find a policy that is best suited to your needs and save you money in the process.
Step 4. Save with friends:
Ask your parents or friends to oversee your savings plan. If you have someone holding you accountable, you will be less inclined to fall behind on your savings plan.
Step 5. Pay off your credit card:
Credit card interest rates are notoriously high. Constant use without complete payment at the end of the month can lead to significant debt. Many people get stuck using a credit card and struggle to break the cycle as interest continues to accrue. Make paying off your credit card a priority. Debit cards are an ideal alternative, providing a similar level of protection for online and over the phone purchases, without the significant interest rates.