The most recent headlines would have you thinking that a recession might be on the cards. Indeed, several economic indicators are looking more and more grim: economic growth has slowed dramatically, the housing downturn has taken hold, wages growth has stalled and our standard of living hasn’t been this low since before the last recession.
While it’s not yet cause for alarm, it’s better to be safe than sorry. Here are our tips to consider, to prepare your finances for the worst case:
Refinance your Home Loan
Mortgage stress is real and affects 30% of owner-occupied borrowers. Don’t be among that statistic – the home loan market is incredibly competitive, so hunt for a better deal on your fixed or variable loan to save some serious dollars in the long run.
Here’s a handy rule of thumb: if the home loan rate doesn’t have a ‘3’ in front of it, keep looking.
Consolidate your Debts
You could be saving up to thousands by consolidating your credit card debt across multiple cards into one low rate. You might want to opt for a zero per cent balance transfer credit card.
But if you’re thinking of breaking up with your credit card once and for all, get yourself a personal loan, pay off outstanding sums and pay off just the one payment each month.
No More Naughty Pleasures
Are you guilty of eating out or impulse shopping one too many times? Think twice before you make any unnecessary purchases – it could be the surest way to save you a lot of money in the long run.
Look at your bank statement, identify your naughty pleasures and scale back your spending.
There’s no better time to stop paying the lazy bills, too many Aussies ‘set and forget’ the deals they’ve signed with their telco or energy provider. You could be saving yourself a small fortune a year on household bills by choosing the best time to switch.
Make Quick Cash
Finding ways to make money has never been easier – these days, just about everyone is looking for someone to drive them around, walk their dog, paint their walls, deliver their food, or build their furniture. Browse around online marketplaces like Airtasker or Freelancer to pick up a sweet side-hustle that fits around your schedule. Consider selling excess items on Gumtree or Facebook.
Be choosy about your Cash Stash
Now is the time to start squirrelling money away so that when push comes to shove you have an emergency fund to see you through. A buffer fund fund should be the equivalent of 6 months of wages, which might sound daunting if you’re starting from $0, but there’s no time better than the present. To make your savings work for you, hunt for a savings account or term deposit that will give you the highest interest rate around.
Put your credit card to work
Responsibly, of course. Credit cards can be great tools if used wisely, as they provide flexibility, safety and spending power.Make sure you’re getting a reward for your spending and if you are carrying a balance, negotiate your purchase rate so you pay less in interest.”
Are all your investments and savings in just the one place? In order to minimise the impact if things go bottom-up, it could be a good idea to spread your money across different assets or investments.
The devil is in the detail: a few dollars here and there will inevitably add up over time to quite a sizeable sum. If you keep your eyes peeled, there are ways to save on your weekly grocery shop: look out for non-perishable items on sale or family-sized packs.
Consolidate your super
Among many other things, one thing that the banking Royal Commission has highlighted has been the way in which account fees – which are ‘out of sight, out of mind’ in a way that grocery shopping isn’t – can eat into your wealth without you realising. According to the Productivity Commission, a third of superannuation accounts are unnecessary duplicates, which cost Aussies a collective $2.6 billion a year in extra fees. Time to take action here!
This information is current as at 09/04/19. This article has been prepared by Heart1Stop, a social media brand owned by Heart Mortgage Services and Heart Financial Advisers. The information contained in this article is an overview or summary only and it should not be considered a comprehensive statement on any matter nor relied upon as such. The views expressed here are not those of Heart1stop, Heart Mortgage Services, Heart Financial Advisers, shareholders, directors or staff and associated contractors and business associates. This article has been prepared without taking into account any person’s objectives, financial situation or needs. Because of this, you should, before acting on any information contained in this article, consider its appropriateness, having regard to your objectives, financial situation or needs. Any taxation information contained in this article is a general statement and should only be used as a guide. It does not constitute taxation advice and is based on current laws and their interpretation. Each individual’s situation may differ, and you should seek independent professional taxation advice on any taxation matters. While the information contained in this article may contain or be based on information obtained from sources believed to be reliable, it may not have been independently verified. Where information contained in this publication contains material provided directly by third parties it is given in good faith and has been derived from sources believed to be accurate at its issue date. It is not the intention of Heart1Stop or Heart Mortgage Services and Heart Financial Advisers that this publication be used as the primary source of readers’ information but as an adjunct to their own resources and training. To the maximum extent permitted by law: no guarantee, representation or warranty is given that any information or advice in this publication is complete, accurate, up to date or fit for any purpose; and no party of Heart1Stop or associated entities as mentioned is in any way liable to you (including for negligence) in respect of any reliance upon such information. This article may also contain links to websites operated by third parties ("Third Parties") who are not related to Heart1Stop. These links are provided for convenience only and do not represent any endorsement or approval by us.