20 Mar 2020

How to get your debt in check after the festive season

The festive season is gone, and how great it was. Now the fun times have passed and you’re full of fond memories, you’re probably noticing your bank account if far too empty. It can be especially disheartening if you were well on track to saving for your house deposit, and now you have to push it back.

We’ve all been there. We can all get too excited and carried away with the festivities, and by the time we realise we’ve blown our budget, it feels like it’s too late to fix. 

But don’t fear. There’s a way you can get your house deposit back on track by following a foolproof savings process. 

Get back on top of your financial data

Your financial data gives you clairvoyance. It tells you if your budget is working and helps you project how your finances will look in future. 

It’s important not to beat yourself up too much when you notice you’ve overspent. Life happens; unforeseen expenses, emergencies, oversights and more. Routinely looking at your financial data reminds you to get back on track when you notice you’ve gone a bit over the top during some months. 

Common forms of financial data you can get today:

  • Bank statements
  • Credit reports
  • Credit score

Cash flow shows you how your money moves 

Think about starting a cash flow statement. You may need to set one up yourself using Excel or Google sheets. It will tell you how much money is coming in and how much is going out. 

Sometimes, we think that we’ll be in ‘the black’ because our lifestyle is within our means. This may be the case, but if we don’t measure it, we can never be sure. There’re are also payments, mostly small ones, which chip away at our net amount just by virtue of us forgetting about them. 

Do you have any paid subscriptions that you just don’t use anymore? These are usually small and easy to miss, but add up over time. Think about it this way; if you save the money you spent on that subscription and put it into your super account, that money would be growing at an average of 8% per year…yes, that ends up being a lot of money.

Cash flow shows you where your money moves. It’s like a big stream that splits into smaller streams. Your biggest stream will be your net salary. From there, your money will flow toward expenses, debts and savings. 

Talk to your lender about refinancing 

At Mortgage House, we know that life happens. Whether that’s having a family, losing a job or a medical emergency; we make sure that your home loan is suitable for where you are in life. Refinancing is not complicated or scary, it’s simply switching to a home loan that’s a better fit for where you are in life. 

Check out the refinancing options here.

Pay more than the minimum

This may seem obvious, but it’s always best to pay more than the minimum amounts on your debt. Because in the world of finance, the law of compounding interest works in your favour. The more you can afford to pay off, the less the balance compounds and they less you’ll end up paying back. 

Budgeting is not a dirty word

Your budget isn’t meant to be the thing that keeps you away from all the nice things in life. It’s the thing that helps you reach your goals so you can have more nice things and less debt. 

Why most people fail with budgets is because they tend to constrain themselves with unrealistic expectations. Then, they burn out and get a big hit of FOMO; deciding that budgeting just isn’t worth it. Well, it is worth it, you just have to be realistic and only manage what you can manage. Consistently putting away a small amount is far better than big random deposits. 

Refinancing with Mortgage House

Refinancing is the right move for many homeowners. People have saved thousands of dollars and years of time by making wise refinancing choices.

It’s a good idea to review your home loan periodically to make sure that you’re always getting the best deal possible. Check out our switching mortgage calculator online.

If you have any questions about refinancing, or you’re already considering it, give us a call at 133-144. We’ll give you free advice, and help you determine whether or not refinancing is the right move for you!

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