DESPITE the possibility of further rate cuts to come this year, it is 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.
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 have not 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 are travelling during the holidays.
Following are three suggestions that can help you stay on track this summer.
Redo your budget: If you haven't already revisited and prepared your budget for the summer holidays, 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 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 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 is a good idea to continue repaying your mortgage at the old 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 do not have to remember to transfer the dollars each time.
The funds are simply transferred on the date you select (it is a good idea to make this on your pay day or the day after).
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 go through your mortgage with a fine-tooth comb and to make sure your finances are in order before the holidays.
A home loan health check can help you determine whether features of your loan that you are not using could help you get ahead with your repayments, or if savings could 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, phone Richard Windeyer on 1800 01 LOAN.