Budgeting your home loan repayments with a family in tow can be tough. With the ever-rising cost of living, it’s no wonder many Aussie families are struggling to juggle their finances between mortgage repayments and family needs.
From child-care payments to unforeseen emergencies, families certainly see a lot of cash flow. To help you out, we’ve put together a list of the best ways you can budget your home loan repayments with a growing family.
Don’t be afraid to refinance
While refinancing might seem like a lot of effort, the money you could save is considerably worth it. Although a majority people are generally scared of what they don’t know, refinancing is not as hard as many think it is.
To start, it’s good to compare different lenders and see what kind of deal you can get, or even see if your current lender is willing to offer you a better rate. With the current low interest rates, it’s the perfect time to score a better mortgage deal. And as for effort, chances are the lender will want your business, and they’ll be more than happy to make the process as simple as possible. For more info and all the other in-betweens, check out eChoice’s refinancing guide.
Create a 5-year plan
Chances are, it’s the unexpected events that throw your finances out-of-whack. And while you can’t plan for what you don’t know, there are some things you can prepare for. For example, if you know you’re going to want to have another child in the future, start planning now! By the same token, if you know your car’s up for replacement in a few years’ time, don’t let it sneak up on you and start preparing.
A five-year plan, even if it’s not set in stone, can help you prepare for the future and make sure that you’ll still be able to manage your mortgage repayments when you have big changes to your cost of living.
If you do see a big financial hit coming up, there are a few things you can do to help yourself prepare financially:
- Cancel any unnecessary subscriptions
- Eat-out less often
- Consider selling any unwanted items online or have a garage sale
- Buy your groceries in bulk and look out for specials
- Give-up the takeaway coffee – it’ll be better for the environment plus your pocket!
Consider a fixed-rate mortgage
Having a fixed-rate mortgage can help put your mind at ease when it comes to managing your household budget. With a fixed-rate mortgage, you’ll know exactly what your repayments will be, giving you the peace of mind to plan ahead with confidence.
However, be warned. Although fixed-rate mortgages have their benefits, if rates drop, you won’t be eligible for the benefits. Often, those on fixed-rate deals also don’t have access to redraw facilities and in most cases, they either can’t or are only able to make limited extra repayments.
Budgets are your friend
Financial difficulties have a habit of sneaking up on us, but with a disciplined approach to budgeting, they’re sure to have less of a sting.
Having a good budget means assigning your pay, keeping track of your spending, and assigning limits. How much money are you willing to allocate to going out per month? How about groceries? Check out eChoice’s Home Budgeting 101 for more info.
Words by Kathryn Lee
Are you looking for a new home loan deal? Whether you’re wanting to refinance, or you’re looking for your first home, contact eChoice and one of our friendly brokers will be able to help guide you to the best deal.