After more than a year of record-high interest rates, homeowners may be frantic to find methods to alleviate the financial burden.
While family finances cannot be saved overnight, there are steps homeowners can take to begin developing healthier money habits that will eventually lead to more financial independence.
Regional director and chief executive of Re/Max of Southern Africa, Adrian Goslett, is optimistic that we have reached the conclusion of the interest rate hike cycle and anticipates that an interest rate decrease may be around the corner.
“We should hopefully be entering into a slightly more stable economic period than we were in last year. If this is the case, this will offer homeowners an opportunity to form better financial habits and to keep on top of their debt levels so that they will be better prepared for any future economic downturns,” said Goslett.
Re/Max Southern Africa provided their top three home finance suggestions to assist homeowners establish healthy financial habits:
Budget for upcoming expenses
A lot of financial worry may be avoided if enough time is spent planning for future needs.
Aside from creating a monthly budget in which you identify all of your regular debit orders and spending, consider what other ad hoc expenses may arise during the year, such as car servicing, birthday presents, licence renewal fees, and so on.
Once you have compiled a list of all of your expenses, devise a strategy for covering them so that you have ample time to save up, rather than paying on credit.
Set up emergency savings
Unexpected expenses, such as emergency medical bills or replacement costs for a broken refrigerator, will always come, no matter how diligently you prepare.
To prevent having to pay for these products on credit, consider saving for an emergency fund. Even if you can only afford R100 each month, every little bit counts.
Make extra payments towards your home loan
This behaviour is beneficial for a variety of reasons.
Not only will it reduce the overall amount of interest you pay throughout the loan term, but it will also prepare you to pay a larger amount on your house loan so that you do not feel squeezed if interest rates rise.
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