OK on the
3rd of March the RBA put up interest rates by 0.25%. This leads to interesting
questions. What does that mean for me? How much extra will it cost me? How can
you accommodate for the extra payments in your household budget?
Well let's
look at it from 5 different home loan interest rates debt amounts.
On a
$100,000 loan, your minimum repayments over 25 years will go up around $15.37
per month.
On a
$200,000 loan, your minimum repayments will go up around $30.74 per month.
On a
$300,000 loan, your minimum repayments will go up around $46.11 per month.
On a
$400,000 loan, your minimum repayments will go up around $61.47 per month.
On a
$500,000 loan, your minimum repayments will go up around $76.84 per month.
So there is
no use complaining about the interest rate rise. We just need to deal with it
in the best way possible. And the best way possible is to have a tight monthly
home budget.
OK for the $100,000 loan and the
$15.37 per month.
Being the smallest rise this will be the easiest to digest. There are many
different ways to include this in your monthly budget. Some quick ones off the
top of my head include:
Giving up
your morning coffee.
Stop buying
bottled water.
Learn how to
conserve energy in your household so you save $5 a month on electricity, gas
and water.
Slow down
when you drive your car. Stop being a lead foot.
Use petrol
vouchers. They might add up to 3 or 4 dollars a month in savings towards the
$15.
For the $200,000 home loan interest
rates and the increase of $30. Some more drastic steps might be needed to make this
payment.
Cancel your
monthly or weekly lotto ticket. You're never going to win anyway (Sorry!)
Avoid
friends and social situations that cost money.
Start using
refill ink in your home computer.
Cancel any
magazine subscriptions.
Stop getting
the daily newspaper. Read your information on the internet.
Find a
cheaper hairdresser for your family. Just a $5 saving per member soon adds up.
For the $300,000 home loan interest
rates and the increase of $46.
Stop buying
that carton of beer. It's good for your wallet and good for your health.
Cancel the
gym membership. Start running in the park or at the beach.
Cut out the
smokes.
Find someone
at work to car pool with.
Stop going
to the movies. Stay at home and enjoy DVDs at 20% of the cost.
For the $400,000 home loan interest
rates and the increase of $61.
One night a
month spend in watching TV, instead of going out to a restaurant
Any products
you purchase over the value of $50 make sure you price match in other stores so
that you get the best price.
Cancel your
pay TV for good.
Get rid of
your home phone and start using mobile phones only (get a good cap plan - and
use wisely).
Give up
sports or hobbies that cost you money.
For the $500,000 home loan interest
rates and the increase of $77.
Any of the
above suggestions. Get rid of
the 2nd family car.Cut down on
gifts for other people. Don't cut them out; just cut down on how much you spend
on people outside of your household.
Sell an interest
free product. For example if you are paying $80 each month for a plasma screen
TV that you purchased interest free. Sell the TV. Pay out the interest free
loan. Now you have a free $80 to use to pay off your home loan interest
rates.
Stop giving
to charity. It's nice to give to charity each month. However desperate times
call for desperate actions.
And last but
not least. And this is a strange one. Stop saving for a rainy day. The number
of people emailing me who are behind in their house payments yet still save
$50, $100 or above a week to put into savings. Yes, we all must save. But not
at the expense of paying debts and keeping the banks off our backs. Give up
savings for a little while then when you can resume put some into your savings.
P.S. While
we wrote this newsletter in March there have been some more interest rate
movements. Yes the RBA have put up interest rates by a further 0.25%. This
means you will have to double the above amounts. Hopefully they won't put them
up again anytime soon.
My name is Adam
Goulding and my story is quite simple. Six years ago my bank balance was so low
paying rent was a big problem.
Then like a
flash of lightning, a thought so extremely simple, yet a powerful realization
hit me. Whatever happened in my life with money up to March 15th 2005 wasn't
working!
Then my
girlfriend, Renee (now my wife) let me in on her system for growing money.
Knowing Renee was much better at handling money than me, she could help. She
told me secret number one of keeping more money in my bank account. This was
the KISS principle, KISS simply stands for "Keep It Simple Stupid".
Now I have
written a book on getting out of debt and a free monthly newsletter. I and my
wife have turned our household budget around. Saving money in all sorts of ways.
Plus getting rid of our credit cards and loans. Find it at
[http://www.mrhomebudget.com.au] my nick name is now Mr. Home Budget.
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