Pay off your mortgage sooner with this 2020 finance to-do list

It’s easy to get overwhelmed with a long list of tasks, so we’ve simplified things for you. Just tackle one job on this list each month to make it a whole lot easier to pay-off your mortgage in 2020.

January: Create a monthly family budget in four steps

Step 1: Calculate your household’s monthly income
Step 2: Work out all your monthly expenses
Step 3: Set up your budget using the Sorted Budgeting Tool
Step 4: Stick to it throughout 2020

February: Get a home loan health check

A startling amount of home owners don’t know the interest rate they’re paying on their home loan. Now’s a great time to speak to us about whether it’s time to consider:
– fixing the rate of your home loan
– switching to a principal and interest home loan
– setting up an offset account.

March: Prepare for the 2020/2021 tax year    

If you run your own small business, consider the following four tax tips ahead of the 2020/21 tax year.

1. Separate your business and personal accounts to avoid using your business bank account like a personal ATM machine.
2. Establish a second business account to pay tax and GST and assist with cash flow.
3. Stop using cash for business transactions – it’s easy to misplace receipts and miss out on deductions.
4. Learn in advance what you can and cannot claim.

April: Cut up the credit card?

New Zealand’s credit card habits cost $700 million in interest during 2017.

By now the family budget you set-up in January should be running smoothly. The next question to ask yourself is: do I really still need a credit card if a debit card will suffice?

May: Review your Kiwi Saver and any other investments with an adviser

Check in with an adviser to make sure your current plans and investments are doing the best for you. Are you on track for your retirement goals. Can you make any positive improvements with any pay increases you may have had?

June: Review your spending

Print out three months of bank statements and credit card statements and have a good review of where your money is going. Ask yourself these questions Are you on track with your budget or have you strayed away? Is your surplus money contributing to your financial well being or someone else’s?  Can you trim back and put this money towards mortgage reduction or savings?

July: Review your insurance costs

Whether it’s your home and contents insurance, your car insurance, or a life insurance policy, by calling three or four insurance companies, getting quotes, and then comparing, you can save hundreds of dollars each year.

August: Ask for a pay rise

If you want to earn more money to put towards your financial goals, consider asking your boss for a pay rise. Here are six tips for broaching the topic:

1. Schedule a time with your boss and inform them of the meeting’s purpose.
2. Know what your industry peers are getting paid.
3. Clearly outline the value you bring to the company.
4. Have reasons ready for why you want the pay rise (children’s education, etc.).
5. Don’t take your employer hostage by threatening to move to a rival company.
6. If you receive a ‘no’, ask for specific KPIs to work towards and ask for a review date.

September: Look into your banking fees

How much are fees eating into your savings and spending accounts? If you don’t know, find out, then shop around for a better deal.

October: Cut back on take-away coffees and other items

Buying a $4 take-away coffee each day costs you a whopping $1,460 per year. Making it yourself a plunger cofee costs just $260 – a saving of $1200.

Consider other luxuries you can cut back on too, such as wine, beer and takeaway food.

November: Start saving about 20% of your pay

Now that you’ve got most of your finances in order for 2020, aim to save around 20% of your pay to give yourself a handy buffer.

The exact amount you aim to put away – and whether you save it, invest it or put all of it immediately towards your mortgage – will depend on your financial goals.

December: Set a New Year’s resolution goal for 2020

The December holidays are a great time to sit back and take stock of what’s really important to you and your family.

So use this time to carefully consider what financial goals you want to achieve in 2020 – whether that be paying off your current mortgage sooner, or purchasing an Investment Property.

If you’re stuck for ideas, come in and have a chat to us. We’d be more than happy to help you identify goals, and can also help with other suggestions listed above.

 

 

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.