December 05, 2012
Despite the possibility of further rate cuts to come this year, it’s important to keep your seasonal spending under control so that you don’t get into strife when reality bites!
Summer holidays are just around the corner, and with the focus on buying gifts, finalising travel plans and organising your social calendar, now is a great time to review your finances to make certain everything is in top shape.
In the weeks leading up to Christmas, it is a good idea to take some time out of the frantic festive season to manage your mortgage and financial commitments to ensure that everything is under wraps before you jet off on your summer holidays.
Review your budget so that it accounts for holiday spending, add more when you can to build your financial buffer to cover any unexpected expenses, and if you haven’t already you may look at scheduling automatic payments for your home loan and other debts to be transferred as soon as you get paid. Scheduled automatic payments are particularly important if you’re travelling during the holidays and unable to regularly check-in on your financial obligations.
Creating a budget and staying on top of your finances whilst on holiday can be made easier by taking the necessary steps now to put yourself ahead. Following are three helpful hints that can assist you to stay on track the summer.
Redo your budget: If you haven’t already revisited and prepared your budget for the upcoming summer holidays, I suggest you do so now. Your budget should be reassessed regularly as your finances can vary from month to month. Revisit your budget and expenditure from last year’s summer holidays to help ensure that your budget for this Christmas is as accurate as possible. Factor in any areas where extra spending might arise and where costs can be cut and possible savings made this festive season.
Create a financial buffer: By repaying your mortgage above the required amount you can ensure that you are financially prepared for the summer holidays. By doing so, you will develop a greater peace of mind by having more funds at your disposal, if need be, and it will help with reducing the interest payable on your loan. Keep in mind that if your interest rate has recently dropped or drops next month, it’s a good idea to continue repaying your mortgage at the pre-rate cut rate.
Let your lender do the remembering: Many lenders allow you to set automatic home loan and other debt repayments well into the future, so you don’t have to remember to transfer the dollars each time. The funds are simply transferred on the date you select (it’s a good idea to make this your pay day or the day after). A tip for the future is to remember that you may need to increase your automatic repayment amount if you have a variable interest rate that increases at any time during your loan term.
Remember, now is the perfect time to review your mortgage with a fine-toothed comb and to make sure that all of your finances are in order before the holiday period. A home loan health check can help you determine whether there are features of your current loan that you are not using that could help you get ahead with your repayments or if further savings can be made by switching loan products. These tips will help to ensure that you start the New Year in good financial shape.
For more information contact Richard Windeyer on 1800 01 LOAN or click here to "Book a Meeting"