How to take control of your debt in 2017
The New Year is an excuse to celebrate with friends, forget the mistakes of the previous year and look forward to the future. But it's also a time that many Australians choose to make a promise to themselves: that they'll eat better, or work harder, or one of hundreds of other little goals that make up our collective New Year's resolutions.
You'll be unsurprised to learn that a huge number of Australians are making money their focus this year. Earn more, spend less, the usual drill. One survey from financial app Money Brilliant found that 96 per cent of respondents to a resolutions survey had better money handling on their minds in 2017.
If you count yourself among these financial warriors, then you might be worrying just how you can take control of your money this year and keep that promise to yourself. Saving is all well and good, but the true power comes from controlling the debt you already have. To help you on your journey over the next 12 months, here are our top tips for managing that mortgage.
Separate your finances
The true secret to money matters is the right mindset.
The true secret to money matters is the right mindset. You can scrimp and save all you like, but the reality is the stress money can have on your psyche can be overwhelming. That goes double if you are trying to make a big change through a resolution.
The trick is to separate your finances. Rather than having one big pot of cash that you are constantly draining, feeling like you are stealing from your lifestyle to pay for your business, you keep them apart. Your salary goes into one pile, your rental income goes into another, and you use those funds to pay for the relevant expenses. No more scrimping on your lifestyle so you can keep the maintenance up on your rental property – they all stay within their own corners.
Use the right structure
Too many people simply take the first loan that their bank is willing to give them, thankful to get the opportunity to give their lender their hard-earned money! The reality is that you could be robbing yourself of an opportunity to manage your debt better, pay it off sooner, and build your wealth more easily with the right loan structure.
Principal-and-interest loans all too often result in you paying far more interest than is necessary, as they target the interest payments first before moving on to the principal. With the right interest-only loan and a credit facility, however, you can put your money to work paying off your loan faster.
Work with the experts
Nobody is a financial expert as soon as they are born.
Nobody is a financial expert as soon as they are born. In fact, a lot of us still have trouble with some money matters! No one person is an island, and if you want to take control of your debt this year, you have to be able to ask for help.
That's where Think Money comes in. Our business is dedicated to helping people like you take control of their finances and make the most of their money. If you want 2017 to be the year that you start making headway into becoming debt free, or even financially independent, you need to come and speak with us.
To find out more, come along to one of our special seminars on financial security through property investment, or get in touch with one of our property mentors today.