Strategies on How to Save $500+ Per Month | Zippy Financial

In an era where managing average expenses per month can be challenging, finding ways to save money is more important than ever. Whether it’s cutting down on daily expenditures or reducing the average mortgage in Australia per month, there are several strategies you can implement to save over $500 each month.

Understanding Your Financial Health

The first step in saving money is understanding where it goes. Start by tracking your income and expenses. Categorize your spending and identify areas where you can cut back. This will give you a clear picture of your financial health and help you make informed decisions.

Smart Budgeting Techniques

Effective budgeting is crucial for financial success. Consider adopting the 50/30/20 rule, where 50% of your income goes to necessities, 30% to wants, and 20% to savings. Alternatively, try zero-based budgeting, where every dollar is allocated to specific expenses, savings, or debt repayment.

Reducing Household Expenses

Look at your household expenses and find ways to reduce them. Simple changes like switching to energy-efficient appliances, buying groceries in bulk, and meal planning can significantly lower your monthly bills.

Negotiating and Shopping for Better Deals

Don’t hesitate to negotiate your bills. Contact service providers for better deals on utilities, insurance, and phone plans. Use comparison websites to find the best rates and switch providers if necessary.

Debt Consolidation and Refinancing

If you have multiple debts, consider consolidating them into a single loan with a lower interest rate. This can reduce your monthly repayments and save you money in the long run. Refinancing your mortgage can also lower your average mortgage in Australia per month, freeing up more money for savings.

Strategic Approaches to Debt Consolidation and Refinancing

Assessing the Landscape of Multiple Debts: Begin by conducting a comprehensive assessment of your existing debts. This includes credit cards, personal loans, and other outstanding balances. Understanding the types of debts, their interest rates, and repayment terms lays the foundation for an effective debt consolidation strategy.
Consolidation for Financial Planning: Integrate debt consolidation into your broader financial planning. Align this strategy with your overall financial goals, whether they involve saving for a major purchase, building an emergency fund, or initiating property investment. Consolidating debts strategically contributes to a more robust and focused financial plan.
Interest Rate Considerations: Emphasize the significance of interest rates in the consolidation process. Seek opportunities to consolidate debts at lower interest rates, as this not only reduces the total interest paid over time but also aligns with the goal of optimizing financial resources for property investment or other long-term objectives.

Exploring Mortgage Refinancing for Property Investment

Understanding Mortgage Refinancing: Provide clarity on the concept of mortgage refinancing. Explain how refinancing involves replacing an existing mortgage with a new one, often with better terms such as a lower interest rate. Emphasize that this financial maneuver can significantly impact the average monthly mortgage payment, creating opportunities for property investment.
Unlocking Savings for Investments: Highlight the role of mortgage refinancing in unlocking savings for property investment. By securing a lower interest rate through refinancing, homeowners can redirect the freed-up funds towards property investments. This proactive approach aligns with the wealth-building aspect of property ownership.
Long-Term Vision for Property Investment: Encourage a long-term vision when considering refinancing for property investment. Emphasize that the benefits of refinancing extend beyond immediate savings, creating a financial environment conducive to sustained property investment. This aligns with the wealth accumulation potential that well-timed refinancing can offer.

Maximizing Income Streams

Boosting your income is another way to save more money. Look for side hustles, freelance opportunities, or part-time jobs. Consider investing in stocks or mutual funds for additional income.

Long-Term Savings Strategies

Focus on long-term savings strategies like optimizing your superannuation, investing in a diverse portfolio, and setting up an emergency fund. These steps can secure your financial future and help you save consistently.

Utilizing Technology for Financial Management

Leverage technology to manage your finances better. Budgeting apps and online tools can help track your spending, set savings goals, and monitor your progress.

Saving $500 or more per month is achievable with the right strategies and discipline. By understanding your finances, budgeting smartly, reducing expenses, and maximizing income, you can improve your financial health and save a significant amount each month.

FAQ

A: Creating a budget is crucial for understanding your spending habits. By going through your bank statements, you can identify areas where you might be spending unnecessarily and can cut back.

A: Shopping around for better deals on your household bills like electricity, gas, and insurance can help you save a significant amount of money each month. You can either negotiate with your current providers or switch to new ones offering better deals.

A: If you have multiple debts, consider refinancing to bundle your loans together. This can reduce your monthly repayments and the interest you pay.

A: If you have multiple superannuation accounts, you’re likely paying extra fees. Consolidating them into a single account can save you money now and increase your future wealth due to the power of compound interest.

A: If your income hasn’t been affected by financial downturns, consider banking any savings you make from these strategies. This can help you build a “rainy day” fund for future needs.

A: Zippy Financial offers expert assistance to guide you towards a brighter financial future. They can help you save money on household bills and navigate challenging financial times with confidence.

Phone: 1300 855 022
Email: clientservices@zippyfinancial.com.au

Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business.

About the Author:

Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilizes her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.

Connect with Louisa on Linkedin.

Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).

Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial.

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How to make your money work harder for you: interest rate vs. loan amount | Zippy Financial

When you’re applying for a new home loan or refinancing your existing mortgage, it makes sense to look for the cheapest possible interest rate.

But looking for the cheapest loan is not always the best strategy.

You must be thinking I’m crazy for suggesting that sometimes, you should pay a higher interest rate – but hear me out!

In my experience as a mortgage broker, I’ve learnt that far too many borrowers focus purely on the interest rate when comparing loans. They do this, rather than focusing on the total balance of borrowing they can achieve.

When Does It Pay to Pay More?

There are some situations when it makes more sense for homebuyers and property investors to opt for the loan that suits them best, rather than the loan that costs the least.

For instance, let’s say you’re refinancing. You’ve had your home loan for five years, and the value has grown from $700,000 when you bought it to $800,000 now. Your loan balance is around $560,000.

You could go with Lender A – their 2-year fixed home loan rate is very low at 2.09%. But they’re only prepared to lender to 75% of the property’s current value, which is $600,000. You can refinance and access $40,000 equity.

The problem? The purpose of refinancing is so you can renovate the kitchen and add a pool. That’s going to cost way more than $40,000.

Fortunately, you have the option of going with Lender B. Their interest rate is higher at 2.35%, but they’re willing to lender you 80% of the property’s value, which is $640,000.

This gives you access to the full $80,000 you need to renovate the kitchen and install a pool, with some money left over to recarpet the bedrooms.

Yes, you are paying a slightly higher interest rate, but in return you’re able to achieve your goals. In this instance, the renovation could potentially add far more value to the home than it cost, which will far outweigh the small amount of extra money spent on interest anyway.

Keep You Eye on the End Goal

When working out how much to borrow and setting up the right loan structure, the most important thing to consider is your end goal.

That might be getting the cheapest possible interest rate.

Or, it could be refinancing to get the most equity out, so you can use those funds on a renovation or to purchase an investment property.

Or, it might be borrowing the absolute maximum amount you can borrow, so you can leverage that money further as an investor.

Or, it could even be locking in a super-low fixed interest rate, so you have peace of mind that your repayments will be low for the next few years?

Everyone’s needs are different, which is why the right lending solution for you is so personal. There are risks and rewards of each strategy, and by working with a mortgage broker, you can talk through the benefits and drawbacks of each different scenario, so you can make the best decision to suit you.

We’re seeing many borrowers take advantage of current lending conditions; with interest rates this low, there’s never been a better time to compare your loan and make sure you’re getting the best possible deal.

In recent weeks we’ve started to see some lenders increase their fixed rate loans, which indicates they might have reached their floor. If you’re considering refinancing to a fixed-rate home loan, give us a ring for a chat, so you can see if you can save yourself some money with a better deal on your mortgage.

This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.