Home Loan Hot Water

Another interest rate rise was delivered last week.?This is now the sixth increase in a row from the Reserve Bank of Australia.?Many borrowers are now feeling the pressure as they find themselves in hot water with their Home Loan.

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As published this week -

Let’s begin with a Budget.?Money is great at following orders, and a budget is simply a plan that tells every dollar what to do.?Without a plan, chaos rules.

Creating your personal money plan gives you confidence.?It lets you know in advance that you can meet your commitments and have enough left to do some of the fun stuff.

Your budget is the most effective tool to uncover the extra dollars needed for higher home loan repayments.

Here’s some of the other benefits that come from budgeting.

??. ?????? ???????? ?????? ???? ???????? ???????? ?????????????? Personal debts like credit cards, buy-now-pay-later, personal loans and car loans, can pile up quickly. ?If you’ve decided that it’s time to get debt out of your life for good, then a written budget will get you there – and Quick!

Start by listing out your debts from smallest to largest. ?Facing this is an important step which gives you the clarity to deal with your debt.

A budget delivers the focus to make immediate progress and repay your debt sooner. ?Being intentional with your money can free up the cash to accelerate your non-housing debt repayments.

??. ?????????????? ???????? ???????????????? Getting into the flow of budgeting allows you to examine your spending habits. ?You’ll discover that you’re spending money on stuff you don’t need or truly value. ?It could be a membership or subscription you don’t use, paying for takeaway or Uber Eats, overspending at the supermarket, or purchasing new clothes when your cupboard is already full.?Whatever it is you can rethink how you spend your money.

You’ll be surprised at how much you can save each month by cutting out unnecessary and random spending. ?Many people comment that they feel like they’ve been given a pay rise after they start budgeting. ?This is simply due to intentionality – you are telling your money what to do and following a plan that is aligned with your goals.

??. ???????????????? ?????????????????? ?????? ???????????? How good does guilt-free spending sound? It’s ok to spend money if you have budgeted for that item or category ahead of time.

Through using a written budget, you allocate your monthly expenses on items such as food, utilities, home loan or rent, transportation costs, other debt payments etc. ?You’re in full control, and you get to tell your money where to go (instead of wondering where it went).

Be sure to include a ‘reasonable’ amount for your fun money category, plus a random stuff category, for the things that seem to just crop up.?This will give you the best chance of sticking to your budget.

Once the budget is done, then all spending decisions are far simpler (but not always easy).?If it isn’t on the budget then your default decision should be “No, not right now”. ?However, if you’ve allocated money for a particular area, then spend up guilt-free.?But once that allocation is gone, stop until the next budget cycle.

??. ???????????? ???????? ???????????? Money is one of the most stressful areas in life. ?By building a budget you’ll be back in control of your bank account and breathing a deep sigh of relief.

Stop living from one pay to the next.?When you know how much money you have coming and going, you can make changes that will help you to spend less and save more.

Without a budget, it’s almost impossible to track where you might be going wrong and how to fix it. ?By following a plan you’ll feel the stress falling away.

??. ???? ???????????????? ?????? ?????????????????????? We all face unforeseen expenses from time to time, from illness, or accidents, or the loss of your job. ?That’s why you need a rainy-day fund to give yourself a financial cushion. Without it you may be forced to use debt such as a credit card when life happens.

$1,000 - $2,000 is recommended as a starting point. ?Later (after repaying all non-home loan debt) increase this up to between 3-6 months of living expenses.

Get this amount together as quickly as possible and keep it in a separate bank account to avoid temptation.?Many people take the opportunity to de-clutter and sell unwanted items that are gathering dust around your home. ?Use eBay, Facebook marketplace, or a good old-fashioned garage sale.?You’ll pull together the money in no time and you’ll improve your living space as well.?

???????? ??????'???? ?????????? ???? ???????? ?????????????? ???????????????? a budget is your personal plan for removing financial stress and making the most of your income.?Imagine when all your bills are paid on time, your spending is guilt-free, and you can start saving. ?These are the ?????????????????????? ???????????? you’ll build one budget at a time.?Whether your income is big or small, the payoffs from budgeting are huge.

Let's talk before your Home loan hot water reaches boiling point. DM me to chat.