New Year. New home. New you. We’ve road-tested some very clever resolutions that can see you forge ahead financially in 2017.
With New Year’s Eve fast approaching, here are a five of the best resolutions for first home owners looking for big pay offs.
1. Pay just $1 extra
Making extra payments on your home loan will shave big bucks from your loan balance during 2017, and that means brilliant long term savings on interest charges – with the added bonus of becoming mortgage-free sooner.
The trouble is, as a first home owner, cash could be a little tight right now. But we all have a dollar to spare, right?
Set a goal to pay just one dollar extra into your loan each day. Yes, that’s a mere $7 each week. You’ll be amazed at the savings this affordable step can provide. On a loan of say, $350,000 that single daily dollar could generate overall savings of $8,633 on your loan interest. Goes to prove the power of one.
Not convinced? Check out Aussie’s online Extra Repayments Calculator where we crunch the numbers for you.
2. Rethink the timing of loan repayments
Each time you pay cash into your home loan it comes straight off the loan balance. This means a lower interest charge the following month so more of that month’s repayment goes toward paying down the principal.
To make the most of this pattern, consider dividing monthly loan repayments into two fortnightly payments. It can be easier on your budget if you’re paid every second week. Plus, there are 26 fortnights in a year so you’ll end up paying the equivalent of 13 monthly installments, not 12. That’s an extra month’s repayment you probably won’t even notice.
3. Make a pledge to shop around
Essential costs like home and contents cover and power bills can take a big bite out of your budget. Chances are you could save by switching to a better deal. Make a commitment to shop around and compare prices each time you receive a major bill. For the effort involved you could be rewarded with generous savings.
4. Develop a wellbeing program for your home
You’re probably thinking of resolutions to boost your personal health and wellbeing. But don’t neglect your home’s health.
Following a regular home maintenance schedule prevents minor repairs blowing out to major expenses. Some activities like lawn mowing can even count towards a new fitness regime. Score!
5. Declutter – live lightly
Kick start 2017 by cleaning out the garage, organising closet space and getting rid of stuff you no longer need. Extend the decluttering to your finances too.
Close down any bank accounts you no longer use to save on fees. Consider consolidating smaller debts into your home loan. While you’re at it, check if you have any lost cash. An estimated $1.2 billion is sitting in unclaimed accounts, and some of it could be yours. Check the government’s MoneySmart website for details.