Under the microscope: cutting back your expenses

When it comes to paying off your mortgage, many of us are in the dark as to where we should be making significant savings. A good place to start? Cutting back your expenses

The lure of small purchases here and there can bring instant satisfaction and seem low in cost and trivial in nature. But these can add up and be a real obstacle for those trying to pay off their mortgage faster.

Indeed, while the cost of these transactions may seem insignificant in the grand scheme of things, they can add up to the equivalent price of that trip you always wanted to take, or the sophisticated new piece of technology you’re desperate to buy.

Of course, there are a large number of ways to pay of a mortgage sooner, including refinancing or downsizing.

For many of us, however, addressing our affinity for micro-transactions is surprisingly effective. Here are a few ways you could look to cutting back your expenses:

Takeaway coffee and bottled water

Buying a barista made coffee in the morning is an irresistible slice of luxury for many of today’s busy workers.

However, while a cup only costs a few dollars, transactions can easily add up for caffeine addicts.

One $5 cup of coffee a day costs you $35 per week, $140 a month or $1,680 a year.

Consider switching to home-brewed coffee in a flask. As well as saving you a lot of money, you’ll be reducing your use of disposable cups.

The same can be said for bottled water, try keep a bottle in the fridge and take this with you whenever you leave the house.

The gym

Having a gym membership can make you feel virtuous and healthy, but how often do you actually make use of it?

If the answer is “not as much as I should” then you need to reconsider your membership.

The daily cost of a gym membership is about the same as a cup of coffee. That’s around another $1,680 each year right there.

The great thing about exercise is that it can be done for free – throw on some jogging shoes and take advantage of the amazing nature and walks NZ has on offer.

Check out this link for some walking and hiking tracks around New Zealand.

Household bills

There are plenty of possible ways you could be overpaying on household bills.

For example many people still pay for a landline, but with Cellphones this need is often redundant. 

And do you really need high speed internet? Most of the mobile suppliers are offering unlimited plan for around $79 a month – with unlimited data, calls and texts. 

For example on the Spark unlimited plan once you are past 22GB cap your max speed is reduced – however this should still work well enough for all your general internet needs. 

The best bit? Most smartphones can double as a hotspot modem to your other devices.

Other common ways of overspending on household bills include failing to set a thermostat correctly, leaving electrical items on standby, using inefficient light bulbs or failing to obtain accurate meter readings.

Dig a little deeper into where your money is going on household bills and look at cutting back your expenses. This savings could be just what you need to reduce your mortgage significantly each year.

Get in touch

If you’d like to look further into cutting back your expenses and mortgage reduction give us a call 0800557654 or book a consult below:

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.