“There are costs and risks to a program of action, but these are far less than the long-range costs of comfortable inaction” – John F Kennedy
With the drop in Fuel prices over the past month and expectation that they will stay low in the first half of 2015, the typical family using 40 litres of fuel per week will save $60 per month.
About half of Australians have mortgages and the latest cut in interest rates means cheaper mortgage, which will also leave households better off. According to the latest ABS data Australians spend $1800 a month on mortgage repayments.
A household with a $300,000 mortgage over 25 years will save about $43 a month if the interest rate comes down by 25 basis points.
Now consider instead of letting these savings go back into General Family Revenue and disappear, we put these savings straight into the home loan, and pay the home fortnightly. On a $300,000 mortgage, you will pay your home off 5 years earlier.
Another income item that often disappears into General Family Revenue is a pay rise. Why not look at putting 50% of your pay rise into super. For a couple earning $85,000 and $35,000 and assuming this couple will get inflationary increases for the rest of their lives. Then that is an extra $78,000 in super, not huge amount but more than they would have had otherwise.
These strategies are not rocket science but as part of an overall plan encompassing these plus several other strategies and a commitment to financial success, you will be on the way to financial freedom.
This information is general information only. You should consider the appropriateness of this information with regards to your objectives, financial situation and needs.