It's a four letter word but a noose around our necks. Believe it or not this financial crisis is the perfect time to sweep away the dreaded "debt" on everything.
“There's never been a better time in the past 50 years to have a financial spring clean."
So says author and financial journalist Nicole Pederson-McKinnon, who wrote “Halve your debt and double your freedom - without the mumbo jumbo.”
“Ordinarily you would expect to pay about $300,000 in mortgage interest over your lifetime. That's at an average 8% rate. We're more like 5% at the moment which cuts that bill down from $300,000 to $166,000 and if you can pay extra you'll save even more."
That’s not just mortgages, that's credit cards and personal loans as well to reduce debt while interest rates are lower isn't easy.
But even just a few dollars more a month will cut home loans, credit card repayments, car loans and other household bills by cutting into the principle not just the interest.
Nicole Pederson-McKinnon has come up with simple ways of halving debt for Today Tonight viewers- without spending one cent extra.
She has come up with three magic bullets.
The first Off-setting your mortgage. “The humble offset account is a mortgage busting secret weapon" she told Today Tonight. “So if you have $10,000 sitting against the average home loan that is going to save you $55,000 in interest over the life of the loan."
Her second tip is to change your tax refund from one lump sum payment at the end of the financial year to a series of smaller payments directly into your pay every week. “You do that by doing a deed of variation with the tax office. It's all it takes," Pederson-McKinnon advises. The extra money in your pay can then be used to make extra payments on debt and the noose loosens a bit more.
Spring Clean Money continued…
Her third tip is to examine every cost you have from every service provider you use, and get a discount where you can from a rival company. “Every service provider, every fixed cost, every bill you pay, utility, insurance, financial payment, you can probably get a better deal on every single one of them. Don’t put up with it, become a new customer yourself and you'll save a fortune. Otherwise walk. Go somewhere else and get the deal you want.”
Of course the simplest way of saving a penny is not to spend it. If you can't control your credit card use, cut it up or put it in the freezer, out of the way, on ice but available for an emergency. "Alot of this is common sense but it’s also focus and appreciating just how quickly you could get out of debt if you do just a little bit of financial housekeeping," Nicole finished.
FOR MORE INFORMATION:
Her book is entitled “Halve your debt and Double your freedom.”
Available through the internet site above.