Times are tough, but the tough get smarter.
It happened, we had another interest rate rise.
This is out of anyone’s control, except for maybe Reserve Bank governor Phillip Lowe.
It’s hard to take but it happened.
Sometimes it takes something hard to happen to create a positive change.
According to a survey by UBank, only 28% of Australians actively use financial management/budgeting tools.
If you aren’t looking closely at your numbers right now, when will it happen?
This is an important and positive habit to get into not only when times are tough, but always, and its what we say is one of the foundations to financial success.
Try to complete it as accurately and honestly as possible. Put everything on the table and then take some time to think about what is really going on. Ask yourself questions like:
- How much of my/our money is going towards the mortgage and what is my interest rate?
If you are paying more than 6% on your mortgage you should be considering refinancing now.
- What % of my/our budget is going towards the necessities in life like food, bills, transport etc and what % is going towards what we call discretionary spends like going out, eating out, holidays/getaways etc.
Consider compromises to your discretionary spends like cutting back or alternative/cost effective ways to enjoy life.
- Do I/we have any money left over each much?
If so, how much on average and what am I doing with the money right now?
Saving it? putting it towards my mortgage as an extra payment? investing it? wait am I really spending it?
Having money left over each month, or a budget surplus is essential if you want to get ahead financially.
If you want to pay off your home loan faster, get ahead financially and not feel so stressed in tough times, consider investing your time into this simple yet powerful activity.
Secondly, get in a habit of reviewing it regularly and ask yourself:
- Am I putting my budget surplus towards what I said I would (savings, extra home loan repayment, investing it etc). If not, why? What’s the impact? What needs to change?
- Has anything changed with our incomes (pay rise, redundancy etc) or expenses (growing family, inflation etc). Again, if so, what’s the impact and what needs to change?
If you would like any assistance with putting together your budget, feel free to book in an obligation free appointment.
Have a great weekend!
The team at Build & Protect Financial Services
