In the last few weeks, we have all experienced, or have come across multiple news regarding the incline of petrol costs in Australia, easily reaching over 200c per L. Although the petrol costs have dropped slightly since this chaos, it is evident that our cost of living are soaring up high with Australia being one of the top 15 most expensive countries to live in world-wide.
So, with all the higher price tags going on around us, what can we do to save more?
#1 - Save on Mortgage
Whether you are buying a property for an investment or to live in, buying a house is usually one of the most expensive transactions you will ever make. It can be a big financial commitment to borrow a lump sum amount of money.
According to many financial institutions, considering "refinancing" could save you more than you imagine, as the slightest deduction on interest percentage can lead to bigger amount of savings over time. As the sound of refinancing may sound troublesome, it could be worthwhile keeping an eye out on the interest rates and home loan features regularly.
You may also want to consider making extra repayments, or have the repayment frequency weekly or fortnightly rather than monthly. Paying the repayments fortnightly will help you pay off the loan faster than if you were to pay monthly, and thus help you save on your interest. For example, if you were to make a $1,000 monthly repayment, this will lead to a total of $12,000 paid off in a year. However, if you were to make a $500 fortnightly repayment, this will lead to a total of $13,000 paid off in a year. As all financial institutions have different terms, check with your own institution to work out the best option possible which will help with some long-term savings.
#2 - Downsize or Choose a Different Suburb
With the real estate "boom" we are going through, perhaps you may want to consider selling now, especially if you are able to downsize, or willing to move to a "less expensive" suburb. Suburbs that have not yet been developed will most likely offer you bigger land/house with a smaller price tag.
If you are considering moving, do some basic research by checking with Council for any potential development plans in the future. Also, most real estate agents have a good understanding of which suburbs are soon to grow, so if you can, talk to them and ask questions.
#3 - Consider Working from Home
With the Covid-19 pandemic, a lot of businesses have transformed from working in the office to working from home. As recent surveys prove, if you are capable of working from home even just a few days a week, it could save you on commuting costs, work clothing, and costs on all the coffee runs you would've needed if you were to work in the office. It is understandable that by working from home, there will be more expenses on phone bills, electricity and internet, however, you can consider claiming tax on "working from home" expenses, which could lead to savings.
This incline of living costs has affected many of us on all levels. With what's going on world-wide, it is hard to imagine what it will be like in the next few years, and if the living costs will continue to soar high. With all these uncertainties, it seems like the only way we can push through, would be to do our part in saving more for our own benefits - at least for the time being anyways.
Good job Team Cocco.