MONEY SAVING TIPS
Category FINANCE
MONEY SAVING TIPS - PUT IT INTO YOUR MORTGAGE OR SAVE TOWARDS A DEPOSIT FOR ONE
By accepting the fact that you will pay your mortgage over a period of 20 years, you are effectively restricting yourself financially in so many ways.
Apply these saving tips to your lifestyle and commit the surplus to your home loan
CHANGE YOUR HOME LOAN TO AN ACCESS BOND
- Ask your employer to deposit your monthly income directly into your bond account?
- When doing so, you make payments only when they are due and can transfer from this facility to your savings/cheque account only as you need funds.
- Whilst the surplus vests in your mortgage account - even if it is just for a few days per month, the daily compound interest the banks charge is calculated on a lower outstanding capital amount thus saving you time on the period of repayment (provided you don't withdraw all surpluses constantly) and definitely saving you thousands in interest
- Leave all surplus funds in your access bond and set yourself a "savings" target
RENEGOTIATE YOUR HOME LOAN INTEREST RATE WITH YOUR LENDER - who say's it can't be done - I've done this for myself and for clients previously - approach your banker. You track record of payment has obviously changed since inception of the home loan - lower risk for the bank implies they could afford an improved interest rate. If they decline the notion, consider switching to another lender. Greendoor Advanced Home Loans Garden Route can assist you with this simple process.
CUT ON THE RESTAURANT BILL
It is estimated that the average South African household spend an amount of at least R 3980 per month towards eating in restaurants.
We challenge you to assess your spending for the past 3 months and to set a milestone of cutting that amount by half.
Calculate the amount you spend on take-out, cut that figure in half and commit 75% of the half you are now spending less on restaurants toward your mortgage. Literally take it out of your savings account and employ it towards your bond account. Then you can,
COOK AT HOME, plan your meals and try to eat at least one meatless meal per week and whilst you're at it,
SCUTINIZE YOUR MONTHLY GROCERY BUDGET - cut it by 20% by eliminating some of those unnecessary luxuries or by simply not going to the grocery store HUNGRY. Shop intentionally and take the time to quickly compare shops and products online - technology has its benefits. Buy in bulk but check the pricing for actual savings. Have a look at http://frugalinsa.com/basic-grocery-list/
SHOP AT THE LOCAL MARKET. In doing so there will be substantial savings and you're supporting the local farmers - this is a fun family outing anyway
REASSESS YOUR INSURANCE frequently to ensure that you are not over-insured and also to ensure that your broker is at the top of their game offering you the best possible financial package for your asset and risk portfolio. Employ the saving to your mortgage or savings account.
STREAM YOUR FAVOURITE TV SHOWS and eliminate unnecessary subscriptions
WASH YOUR CAR YOURSELF and get the kids to help - it could become a fun family activity, just like the good old days
LET YOUR KIDS PITCH IN - teach them to conserve by switching off lights, saving water and closing the fridge
LEARN TO DIY - Google has positive power and fixing things yourself could save you thousands and promote self-achievement
DO HOME HAIRCUTS - Caution - this could be once-off saving only
GET OUT OF DEBT - do you need it or do you want it - seriously. If you really need it, save for it and buy it cash.
Lastly but never the least, DOWNSIZE or SELL & RENT before you lose it.
If times are tough and you're at risk of the bank repossessing the house because you can not keep up with the mortgage payments, place it on the market with one of our qualified consultants to sell quickly at the best possible price avoiding the lasting impact such a process has on your and your family's lives.
Pride can be restored later, another home can be purchased and you portfolio will remain in tact.
Our KPS ambassadors are capable of assessing your portfolio and advising accordingly whether it is to refinance your asset, restructure your home loan or to restructure your portfolio to the extent necessary to align your short and medium term financial objectives.
Be sure to call on us for qualified support.
Author: Johann Cronje - Principal
