Skilfully managing your home loan to save money
The rising cost of living has quite a significant impact on everyone. Managing your home loan in these times can be trying at times and one should not have to experience extra stress if there is a way that one can manage the situation better.
1. Do not reduce your monthly payments.
When an interest rate cut occurs, it is important to not reduce your monthly payments. By maintaining payments that budgeted on a higher interest rate, the rate cut can work to your advantage and help you to pay your bond off sooner. Paying your bond off over a 20-year period should not be daunting, but it is important to remember that a little bit goes a long way and will be effective in the future.
2. Lifestyle Overhaul.
A lifestyle overhaul will not only free up extra cash, but also help you reframe your mind with regards to what you can live with or live without. This overhaul will vary depending on who you are and your lifestyle requirements. You might not be sure where to start, but it could be as simple as cancelling one of the few streaming platforms you pay for monthly, buying less to go coffees, scrapping short term debt, or reworking your food budget. Analysing your current lifestyle will allow you to spot opportunities where you could cut back or cut out. Sticking to your adjusted lifestyle will enable you pay extra towards your bond.
3. Put your bonus / increase to good use.
Receiving a Christmas / annual bonus or increase is always overly exciting, and one has lofty ideas of what you will be spending the money on, whether it be spoiling yourself or others. And why not spoil yourself and your loved ones - but allowing your money to work for you eventually will mean that you will have more opportunities for those desired spoils. Instead of splurging on instant gratifications - use a portion or all, of that bonus or increase to help pay off your home loan. By paying more towards your home loan, one shaves months off, of what is owed - eventually enabling you to pay your home off in less than 20-years.
4. Rental opportunities.
Renting out your home / flatlet or even a room is a terrific way to generate an extra income, which can be directed towards paying off your home loan. There are plenty rental options which one can explore to determine what will suit you and your family best. Many people rent out their homes during holiday periods for a short stint. This is a quick way to generate money that can go straight towards your bond repayment.
5. Sell unnecessary items.
We all have an array of unnecessary items lying around at home that we simply do not use anymore and that just takes up storage space. Instead of giving or throwing these items away - sell them. There are a variety of online marketplaces and second-hand stores that are great spaces to advertise your unwanted / unused goods. This is such a quick and uncomplicated way to make extra money, which could help you cut down on what you owe on your home loan.
Paying extra towards your bond whenever you can makes financial sense. One might not reap the rewards immediately, but one will reap them in the future when you have been able to pay off your bond quicker.
